Pronounced platinum production plummet­ predicted by independent consultant

10th January 2023

By: Martin Creamer

Creamer Media Editor


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JOHANNESBURG ( – Global mine supply of platinum will fall by 500 000 oz to a million ounces as South Africa’s power shortage lowers production from 2023 to 2027, independent precious metals consultant Dr David Davis calculates in a summary report on platinum group metals (PGMs) production and Eskom.

Davis, who has been associated with the South African mining industry and mining investment industry for the past 45 years, also expects Russian PGMs supply to decline by 5% to 10%.

Compiled for Auctus Metal Portfolios of Singapore, Davis’ review points to the danger lower PGM supply presents to global decarbonisation efforts and prices.

He describes the precarious concentration of world platinum supply from power-hit South Africa at around 73%, Russia at about 10% and Zimbabwe at some 8%, as being exacerbated further by Nornickel of Russia's inability to guarantee its 2023 production targets.

In his view, the decline in global platinum mine supply outlook is not being given the attention it deserves.

In addition to inadequate supply of fossil-fuel power, South Africa’s power grid limitations stand in the way of connecting new generation from areas with the best solar and wind resources.

Moreover, recurring PGMs inventory build-up will likely overwhelm temperature-sensitive smelting and refining operations causing exponential production cost increases that will put a squeeze on margins.

Davis expects a "structural change" in the operations of the South African platinum mining industry to maintain power-supply equilibrium, which will likely result in a decline in mine output.

All this comes amid PGMs-based green hydrogen becoming a key decarbonisation pillar and platinum being inextricably linked to vehicle emission standards, which are being  progressively tightened worldwide.

Europe is boosting its green hydrogen ambitions as it looks to secure energy independence and continuous platinum buying will further contribute to upward price pressure as platinum supply dwindles.

A new trade and technology centre dedicated to the growth of the PGMs market is being established in China, already the single largest consumer of PGMs, accounting for more than 25% of total demand.

Anglo American, Honeywell and the World Platinum Investment Council (WPIC) are among nearly 70 organisations that have signed strategic cooperation agreements with the Lin-Gang Group and other related parties in support of the Platinum and Precious Metals Centre, or PPMC, which is being established in the Lin-Gang Special Area of Shanghai.

PPMC is made up of a PGMs research institute, venture capital fund, industrial park and offshore trading market, which will be developed in sequence to support new PGM applications and to grow an industrial cluster. 

As part of its commitment to PPMC, WPIC will move its Asia Pacific headquarters to the Lin-Gang Special Area, where, from 2023, the annual Shanghai Platinum Week, which it co-sponsors, will take place. WPIC will also join the proposed PGMs research institute as a founding member and participate in a joint venture to oversee the development of the industrial park.

So, demand is set to build up and platinum miners and recyclers need to ensure that supply can be sustainably met.

Edited by Creamer Media Reporter


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