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PGM market development has paid dividends, could pay many more, Platinum Day told

Strong consensus that markets need to be developed for platinum group metals.

Strong consensus that markets need to be developed for platinum group metals.

15th April 2024

By: Martin Creamer

Creamer Media Editor

     

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JOHANNESBURG (miningweekly.com) – The market development aspect of the platinum group metals (PGM) industry is fundamentally key, it was repeatedly stated at last week’s 2024 Resources for Africa Platinum Day.

There is strong consensus that PGMs are amazing metals that are incredibly useful as future green metals across a broad range of applications and there is a huge opportunity for PGM mining companies to engage in market development collaboratively.

The PGM elements platinum, palladium, rhodium, ruthenium, iridium and osmium possess far-reaching physical and chemical characteristics that make them sought after by modern technology developers.

“If I could turn back the clock, I would’ve probably recommended to the board a far stronger investment in market development. Every dollar we invest will have a fundamental return long-term,” Implats CEO Nico Muller commented in conversation with chairperson Bernard Swanepoel at the event covered by Mining Weekly.

“I’m encouraged that people are now starting to talk a lot about market development,” Anglo American Platinum CEO Craig Miller commented in his conversation with Swanepoel.

“We need to do market development on the full basket and not just platinum and palladium and ensure that it's PGMs that underpin clean hydrogen in the lowest cost-plus way,” Sibanye-Stillwater CEO Neal Froneman stated in the opening address.

“These are really important metals. They’re really special in terms of what they do. In many applications across the world, they are essential for human existence,” Northam Platinum CEO Paul Dunne highlighted.

“It's important that we give huge focus to the PGMs industry, which 2023 numbers show is the largest employer that spends the most on community development and contributes 10% of total exports to South Africa," Minerals Council South Africa CEO Mzila Mthenjane pointed out.

Meanwhile, as was reiterated at the event, platinum demand is returning to help solve the PGM basket problem, and a supply decline is effectively already happening.

It is not anticipated that prices will necessarily go back to where the industry had previously experienced them owing to drivetrain electrification and additional supply potentially coming to the market through recycling.

The widespread outlook is that because the industry is going through a structural change it should not rely too heavily on traditional price recovery and there is consensus that market development catch-up, particularly in the hydrogen space, must take place.

Mentioned frequently as one of the pivotal market developers is PGM-promoting and South Africa-linked venture capital company AP Ventures, created together with the Public Investment Corporation of South Africa.

AP Ventures has been recognised as the most active investor in hydrogen beginners globally by the Mind the Gap: Venture Funding of Hydrogen Start-ups report by H2UB and after visiting a Texas company in which AP Ventures is associated, Microsoft luminary Bill Gates had this to say: "The energy transition is happening faster than many people (including me!) dared hope.”

In March, AP Ventures announced its investment in the pre-seed investment round of UK-based direct air capture company Airhive, co-leading the round alongside Coca-Cola Europacific Partners. 

Airhive is developing a low-cost, energy-efficient and rapidly scalable technology to capture carbon from the atmosphere. This pre-seed round will support its technology development and the delivery of its second commercial pilot, which will be deployed later this year.

Anglo American Platinum expects prolonged deficits in platinum, a surplus in palladium and a rhodium market to move back into balance in 2024.

The original equipment manufacturer stocking, which took place during Covid, the microchip shortage and then the invasion of Ukraine, has been considerably destocked.

“It’s clear that the market has bottomed out in the last six months,” said Muller.

Fundamental deficits are being predicted along with a tightening market.

“I’m not expecting prices to decline any further from this point,” Muller added.

There is more bullishness about platinum and less about palladium long term.

All indications are that the markets are going to have some price support going into the medium term.

Edited by Creamer Media Reporter

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