The energy systems in the world are going green in a process that is fast becoming irreversible. Hydrogen has emerged as the main storage medium for ‘green’ energy generated from solar, wind and other renewable sources. It is within this medium that South Africa’s natural resource and mineral endowment, including sunlight, wind, platinum and base metals, can be combined within a value chain that offers one of the biggest opportunities to grow and transform the South African economy into a new-age economy.

If we want to guarantee a prosperous future for the children of South Africa, then it is incumbent upon us to put in the required investments to embed all parts of this emerging value chain in an integrated strategy that includes all arms of government working in concert with the entrepreneurial, mining, manufacturing and automotive sectors. As this is a greenfield industrial development, there is no reason why a new execution strategy that integrates all these sectors cannot be conceived and executed – let us not look back in a decade and wonder why we did not develop this nascent industry into a new driver of economic growth for the nation.

Now it is easy to spout great ideas and strategies, transforming them into real on the ground applications is less easily done and this is where Isondo Precious Metals, through its experience at the cutting-edge of the industry, is able to add value to what is a national strategy.

Isondo’s primary strategy has been to embed best-in-class manufacturing facilities for the key components that will be required by this global industry over the next decade as a country blueprint of the future. As an example, storing of wind/solar energy as hydrogen requires electrolysis of water into hydrogen in a process that uses platinum and iridium-based catalysts coated on membranes. Converting the hydrogen back into electricity is done in a fuel cell in a process using platinum and ruthenium catalysts coated on membranes. The value chain includes the membranes, gas diffusion layers, seals, chemical ionomers, metal containing solutions, coating of catalyst substrates and recycling.

While every single step in the process can be done in China (or anywhere else in the world), there is not a single reason why it cannot be done here in South Africa. Isondo has been developing and executing on this blueprint over the past few years. Learning by doing underpins this business model.

The business model shows that both the production of these components in South Africa and the capturing of a reasonable share of the international market is feasible, financially rewarding, and a significant creator of new skilled jobs while assisting in the retention of mining jobs.

It represents a country win at all levels. However, it is clear that Isondo and other companies in this space are competing against international competitors enjoying support from governments with deep pockets where embedding a hydrogen economy is a national imperative. They are supported through the initial start-up, early market stage through readily available funding.

In South Africa, these early-stage funding pools are not easily accessible and hence significant time is lost in the business development process. A strategic fund dedicated to early-stage development in the hydrogen and fuel cell economy is an obvious solution.

Support from companies with vested interests in the value chain would be a game changer in the South African context. Many examples spring to mind. In the platinum mining context, the platinum group metals (PGM) companies are aspiring to shadow and support developments in Chinese cities and other international markets as this represents a source of demand growth for PGM resources. However, investing in South Africa-based fuel cell component manufacturing allows for additional shareholder value creation, adding additional margin to the metal and helping export a value-added product. If credits are obtained against statutory obligations, then this represents a third win in this scenario.

South Africa-based automotive manufacturers are also an important player in this value chain of opportunity. The changing face of the global vehicle fleet towards zero- emission fuel cell and battery electric vehicles means that the current petrol and diesel vehicles currently manufactured in South Africa will come under threat over the next two decades. Working with companies like Isondo will assist the local production lines into the new fuel cell electric arena and again additional value can be derived if this is included in the next incarnation of the automotive production and development programme.

Similar examples of value adding cooperation exists across most manufacturing industries in South Africa. The production processes required to sustain the hydrogen and fuel cell economy is not locked down yet on the international stage and South Africa has a short window of opportunity to embed itself as a player in this new economy. Time is becoming a critical parameter.

This copy was provided by Vinay Somera who is the CEO of Isondo Precious Metals, a company planning to locally manufacture membrane electrode assemblies, which form the heart of hydrogen fuel cells