JOHANNESBURG (miningweekly.com) – This week’s precipitous platinum price plunge to as low as $893/oz is putting the entire platinum industry at risk, making it essential that steady hands are placed on the tiller to ensure that a national patrimony is protected.

While the entire industry has been accepting a lower-for-longer price environment, few will be able to sustain the latest decimation of the price.

The expectation along many industry corridors has been that the price trend would more likely head upwards, and begin getting closer to the gold price’s $1 200/oz range, but instead platinum is at its lowest price ratio to gold since 1987, despite being rarer than gold, which fills umpteen central bank vaults and is mined in countries from Argentina to Zimbabwe.

As long ago as February 2012, former Anglo American Platinum (Amplats) CEO Neville Nicolau was unequivocal about a platinum price of $1 900/oz being essential to maintain long-term production.

But instead, the industry, which since that time has been hit by additional costs, is $1 000/oz shy of that price level, with deep, labour-intensive mines operating at dollar prices that not even a weak rand can sustain.

Well ahead of the latest price collapse, regular reference was being made to half of the industry being under water, and analysts warned in Business Times on Sunday that even industry consolidation through mergers and acquisitions would unlikely save the day.

While Amplats’ exceptional opencast Mogalakwena mine, in Limpopo, stands out as an operation likely to keep its head above water even at these low prices, “something will have to change dramatically”, the head of another opencast platinum operation complained to Mining Weekly Online last month, well ahead of the latest devastating price crash.

The Bank of America Merrill Lynch (BofAML) told the Prospectors and Developers Association of Canada (PDAC) convention, in Toronto, earlier this year that the platinum price would rally if platinum producers cut supply by 300 000 oz to 400 000 oz.

BofAML charged, at the well-attended PDAC, that the blame for the lack of supply discipline lay especially at South Africa’s door.

“As an industry, we need to go for it. We must be bold about cutting supply. The price is telling us that we’re in oversupply and we’ve got to react,” Lonmin CEO Ben Magara commented to Mining Weekly Online on the supply issue last month.

But not enough has been done by the industry as a whole.

Embattled platinum, which is never consumed, requires intense ongoing marketing, with producers needing to invest in the promotion effort – and also to ensure that the metal does not continue to be demonised by the anti-diesel hype, Royal Bafokeng Platinum (RBPlat) CEO Steve Phiri told investors, unionists, analysts and journalists earlier this year.

“You’ve got to market and market and market,” the RBPlat CEO added in a video interview with Mining Weekly Online straight afterwards.

Phiri spoke of the International Platinum Association canvassing Eurozone authorities about the efficacy of platinum-catalysed diesel engines, fitted with gadgets to halt nitrogen oxide (NOx) emissions, to counteract the fallout from Volkswagen's diesel emissions scandal in the US.

Anglo American did a great job promoting the platinum-using hydrogen fuel cell at Davos and mayors of the world’s biggest cities, led by the three times New York mayor Michael Bloomberg, have been pushing hard for a cleaning of the air around major cities, which platinum can deliver.

The World Platinum Investment Council has been providing greater platinum investment opportunity, many calculations point to a deficit of primary supply – and all these marketing efforts must continue.

But, despite the effort to date, the platinum price is stubbornly refusing to turn upwards, and was still down in the $910/oz doldrums at the time of going to press.