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Panel urges PGMs industry to make collaborative, strategic market development investments

Implats refining and marketing group executive Sifiso Sibiya

Implats refining and marketing group executive Sifiso Sibiya

11th April 2024

By: Darren Parker

Creamer Media Contributing Editor Online

     

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Industry experts have agreed that the future of the platinum group metals (PGMs) market appears to hinge on collaborative efforts to make strategic investments in market development to ensure sustained growth and innovation.

Speaking on a panel at the PGMs Industry Day, in Johannesburg, on April 10, PGMs producer Impala Platinum (Implats) refining and marketing group executive Sifiso Sibiya emphasised the importance of market development for PGM producers.

"PGM producers need to commit to market development. The ones who are not yet committed need to look at [what] the market is going to be and what are we are doing at this point in time to ensure that we develop the market. Market development is the lever that we as producers . . . can pull to defend our existing demand, create new demand and grow demand," he said, adding that collaboration with other industry partners was also a key strategy to defend existing demand and create new demand.

Sibiya highlighted the example of Impala Platinum (Implats), along with other major investors such as Anglo American Platinum, the Mirai Creation Fund, Mitsubishi Corporation, Plastic Omnium, the Public Investment Corporation and Sumitomo Corporation, investing in green technology investment firm AP Ventures, which was investing in clean mobility research and development to contribute to the future demand in the hydrogen economy.

In response to these dynamics, he said Implats had shifted its focus from platinum alone to focus on the entire PGMs basket.

In line with this, he reminded the audience that the company had donated 16 ha of land adjacent to its Springs refinery for fuel cell manufacturing, with its partner the Gauteng Industrial Development Zone engaged in the development of the facility.

Highlighting the global scope of the hydrogen economy, Sibiya noted the importance of developing technology locally in South Africa, which held the largest resources of PGMs in the world. He expressed the aim of having fuel cells manufactured in South Africa to add value to the country's products.

Fellow panel member Platinum Guild International Hong Kong COO Tim Schlick added insights on the global platinum jewellery market. He noted that, while demand was growing in India and Japan, China's market remained sluggish.

Schlick predicted that the current market dynamics would persist into 2025, with softening platinum jewellery demand in China but continued strength in India and Japan. He also drew attention to opportunities in platinum owing to market dynamics such as margin compression and increased demand for palladium in Japan.

Schlick mentioned potential growth in the Chinese market, although challenges remained in market funding and consumer demand.

Industry body World Platinum Investment Council CEO Trevor Raymond suggested that platinum jewellery demand might see a boost from investment interest. He made mention of platinum's differentiated business model, which added margin for manufacturers.

Raymond also discussed the diverse and somewhat unpredictable industrial demand for PGMs, with strong growth expected from 2025 onwards.

Technology company Heraeus South Africa commercial GM Kristi Kuhn highlighted the increasing industrial demand for platinum and iridium owing to the hydrogen economy and the energy transition. She predicted stable demand for the current year, with significant growth expected from 2025, peaking in 2026.

Kuhn emphasised the need for collaboration between primary producers and end-users to develop technologies and applications that could replace the entire automotive platinum demand in the mass market. She also mentioned several startups and young businesses developing metals technology.

Raymond reiterated the importance of net-zero investment and discussed platinum investment demand growth, particularly in the US and China. He pointed out that investment demand in China was driven by decarbonisation efforts and the scarcity of platinum mines.

The speakers jointly agreed that there was potential for growth in the platinum market, but the focus needed to stay on marketing development and achieving critical mass in the industry, mentioning that there could be a potential return of rhodium in the automotive industry, despite recent price spikes, and that investors played a crucial role in generating interest in platinum's role in decarbonisation and sustainable investing.

Sibiya urged all stakeholders in the PGMs industry to invest in market development.

"If you are in the PGMs industry and you are not part of the market development, please put some money in that. It's going to be worthwhile in the next couple of years," he said.

Schlick echoed this sentiment. "This is the time to invest in market development. We will see continued growth in jewellery, and we would love to do more about it,” he said.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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