JOHANNESBURG (miningweekly.com) – If a 20% global truck fleet share can be secured at current or near current platinum loading, there is a six-million-ounce opportunity from a demand perspective, according to Valterra Platinum executive head: marketing Hilton Ingram, who added that truck fleets in their thousands are already being driven around China by producers, distributors and users of low-cost hydrogen.

A fundamental driver of truck fleet demand is the reduction by China of its reliance on energy imports from other countries, said Ingram, who sees China as the most appropriate country to establish a low-cost source of hydrogen at refuelling stations ahead of global replication, hopefully also in South Africa. (Also see attached Creamer Media video.)

In response to Mining Weekly’s request for energy-security pursuit insight, Ingram said hydrogen stayed a strategic element in China’s strategy as a result of reliance on energy imports being lessened.

“We’re seeing areas of industrial demand uplift, particularly in China, particularly in response to energy security,” Ingram reported during Valterra’s online and in-person platinum group metals (PGMs) value chain media briefing in Rosebank.

In another response during the webinar, Ingram explained that while Valterra was working with Sasol and other industry players around the hydrogen economy in South Africa, establishing a low-cost source of hydrogen at refuelling stations was best solved in China and then replicated globally.

“The nice thing about it, on the hydrogen side of things, is that China is in its 15th Five Year Plan, and they're talking about significant resource upgrade investments in China.

“We've just in the last week or so had greater clarity around the city clusters that will be impacted by that, and we're waiting to see what each of those individual city clusters and regions are going to focus on, so that'll give us greater insight into the impacts and applications there.

“But the fundamental driver in the space around China is diversifying their energy base, and as result, reducing their reliance on energy imports from other countries,” said Ingram, who is next year’s incoming chairperson the 100-member International Hydrogen Fuel Cell Association (IHFCA), a global non-profit organisation established in July 2022 and headquartered in Beijing.

This has already given rise to the development of China’s current closed-loop hydrogen fuel cell mobility system, which is taking place amid aspirations to advance from closed-loop into a new open-loop era that can be emulated globally.

“So, what you’ll see is truck fleets in their thousands being used by folk that produce low-cost hydrogen, distribute the low-cost hydrogen, and use the low-cost hydrogen.

“You have a company like Rockcheck, which moves its iron-ore from port to its steel mill with fuel cell trucks, and it moves its finished product from steel mill to customer using fuel cell trucks,” Ingram explained. Tianjin Rockcheck Steel Group Company is a Chinese steel manufacturing enterprise based in Tianjin that processes ferrous metals and utilises iron-ore for steel production.

In March, Northam Platinum CEO Paul Dunne expressed the belief that the world had moved from over-estimating hydrogen to under-estimating it and spoke of the need for more extensive China travel to further witness the emergence of the hydrogen economy.

The next step in the journey is looking to develop open-loop systems, which Ingram outlined as requiring low-cost hydrogen produced by one company, distributed by another company, and used by others.

“That challenge, we think, is best solved inside of China, and for the moment we think the best chance of that success is in the Yangtze River Delta region and so we're working with our partners in the IHFCA to try and make that happen.” The Yangtze River Delta region is a major economic and urban region in eastern China where the Yangtze river flows into the East China sea.

“China is incredibly policy-driven and incredibly subsidy-driven. So there's a few bricks that have to fall into place before we're 100% certain of that, and we're driving things in that direction.

“The prize lies in mobility, so we need fuel cell mobility to be successful for us to be successful in the hydrogen space.

“We still have a view that the automotive markets outside of China are healthy. The Chinese market, while high in number of vehicles, is becoming less and less of a driver of PGM demand over time, owing to EV share and also loadings.

“When we look at markets, PGM automotive demand is dominated by US, Europe, the rest of the world, and then it's about China,” Ingram pointed out.

HYDROGEN ELECTROLYSIS

PGMs are also used to catalyse the generation of green hydrogen from electrolysers, but while nice to have, electrolysis is not where the prize is in hydrogen, which is why truck fleets are being targeted, and particularly the refrigeration trucks and the trucks that move mass.

These trucks are going to need the higher energy densities that hydrogen provides, and a 20% share translates into the six-million-ounce opportunity.

The steps that China is taking to achieve energy self-sufficiency have been intensified by the war in Iran and the closure of Strait of Hormuz.

This has resulted in China's chemical companies shifting to production of some chemicals from coal-based feedstocks rather than petroleum, and quite a few of those processes required PGM catalysts at some point along the line, which has lifted 2026 PGM demand.

Automotive demand for PGMs from the green transition and China 7 and other legislation developments are expected to lead to higher PGM loadings over time.

INDUSTRIAL DEMAND

Meanwhile, the industrial demand category remains a catch-all category with a distinct GDP growth relationship. Foreseen are a number of potential areas for future growth and that extends to the hydrogen economy, sustainable aviation, and e-fuels, carbon neutral feedstocks, AI, and cloud computing offer growth potential, as does price-led PGM innovation or substitution.

In jewellery, there is a particular upside potential for substitution in white gold. Five per cent to 7% of gold jewellery markets are white gold, and platinum trades at a significant discount to 18 ct white gold, with innovation conceivably extending that to 14 ct white gold.

ARTIFICIAL INTELLIGENCE

"Platinum and ruthenium are going onto hard drives in data centres and particularly in the US, the legislation around emissions control is leading to increased demand. What is called e-glass, which is very high quality fibreglass, being used to pack chips and the rest of it - that needs PGMs in its production. And then you've got high-quality silicon, which keeps all of this stuff nicely balanced and protected as well, which is another area of demand."

Could data centre demand match auto demand? "Some are talking about it growing tenfold and we've got around 300 000 oz. We've not had it as a distinct category. Yeah, it sat in various categories around industrial demand, but we attribute around 300 000 oz to that, and if you grow it, some people are talking about tenfold, then you get an idea of the complete upside potential.

"But the health warnings around that are significant. Demand will be a function of where it's happening and what people are using in that space. I'm not touting that three-million-ounce figure around," said Ingram.

SUPPLY SIDE

South Africa, in particular, and Zimbabwe, account for an overwhelming portion of world PGM reserves and primary PGM production has largely been flat over the past decade, and recycling, the other source of supply, is not expected to grow to the extent forecast.

Valterra has recycling growth in the low double digits for 2026, and in the high single digits going forward, with its forecasts probably lagging consensus.

“We do have recycling supply increasing, but it's not to the extent that some market commentators see it, and we expect headwinds in that space to persist.

“If you dampen your car sales forecasts, you need to dampen your forecasts of how many vehicles are going to be recycled. Those two markets are not disconnected. They're very much connected,” Ingram explained.

The overall calculation is that platinum markets will continue to be in deficit and palladium moving into a balanced market.

The company has rhodium in deficit to 2028, and in surplus thereafter.