Industry news | worth 8 trillion rand problem: how to release the potential of South African platinu

Issuing time:2023-04-13 15:34

Article source: dailymaverick | translation: the world association of platinum investment


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Car body shells hang from a stand on the assembly line at Nissan's Rosslyn plant in Pretoria, South Africa, April 10, 2019. (photo source: getty images, bloomberg Waldo Swiegers) | on January 23, 2018, is located in South Africa's mpumalanga province Leiden fort outside the town of Booysendal ore, miners in bentham platinum insert reinforced rock in the mine. (Photo by Getty Images via Waldo Swiegers, Bloomberg)

How can we continue to unlock the huge potential of South Africa's platinum group metals industry? That is the R8 trillion question.
The focus is on facilitating the growth of the platinum group metals mining industry by developing markets to achieve the largest resources of platinum group metals in the world. "This will generate around R8 trillion in economic growth for South Africa by 2050," Roger Baxter, CEO of the South African Minerals Council, said in a speech at Resources 4 Africa's Platinum Group Metals Industry Day in Johannesburg on March 28. And create about 1 million direct and indirect jobs.
Any economic or business projections that extend to 2050 need to be treated with caution. But even if there is uncertainty about the long-term forecast for demand for platinum-group metals and their future role in the global economy, at least two things are clear.
First of all, platinum group metals are the "green metals" needed for green energy transformation. "Green metal" is a new term that has emerged as a result of decarbonization efforts to curb climate change linked to fossil fuel use. It illustrates the simple and ironic fact that this transformation would not have been possible without mining.
Since the 1970s, one of the main uses of platinum-group metals in the global economy has been as catalysts for cars to convert hydrocarbons and carbon monoxide from exhaust gases into less harmful gases.

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Platinum group metals have been a key factor in limiting vehicle emissions, and their use has been driven by regulations such as the US Clean Air Act, signed into law by Richard Nixon in 1970, This is a time when even Republican presidents take the science of environmental issues seriously.

These initiatives were originally aimed at smog and air pollution, and as the Minerals Council report points out, a single car sold in the early 1970s emits as much particulate matter as 100 cars sold in 2021, actually owing 99% of the reduction to platinum-group metals.
Despite this, vehicle transport remains a major source of greenhouse gas emissions. According to the Environmental Protection Agency (also Nixon's brainchild), transport accounted for 27% of such emissions in the US in 2020.
Platinum group metals play a range of roles in the energy transition. They are an important part of making green hydrogen in electrolytic cells through renewable energy, which is essential for the decarbonisation of heavy industry and everyday activities involving household appliances.
Baxter noted in his presentation that "platinum-group metals are already playing an increasingly important role in the global energy transition to net zero emissions. At least 30 countries have developed or are developing hydrogen strategies to decarbonize their economies."
"The substitution of green hydrogen for natural gas combined with the substitution of fuel cell electric vehicles (FCEVs) for combustion engines could lead to net CO2 emissions reaching 11% of the Paris Agreement's 2030 target. Annual demand for platinum from FCEVs and electrolytes in 2030 is between 1.6 million and 2.4 million ounces, providing growth opportunities in South Africa, the largest source of raw platinum, from 34 to 51 percent by 2030 from the current 4.7 million ounces."
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Hydrogen fuel cells also require platinum-group metals, which are a clean way to deliver electricity. Pgm-based proton exchange membrane (PEM) technology can harness renewable energy sources such as solar power.

These are just a few examples, and it may be premature to declare the death of the internal combustion engine.
The second is that the past and future supply of platinum group metals will depend on South Africa. No other country comes close. South Africa has 87 percent of the world's known platinum group metal reserves. In the case of palladium, Russia is a key player, but when it comes to the rest of the platinum group metals, South Africa dominates.
It also means that maintaining healthy global demand for platinum-group metals for a long time to come is crucial for the South African economy.
At Northam Platinum's recent interim results presentation, chief executive Paul Dunne presented a series of charts reporting on the company's long-term outlook for platinum group metal supply. By 2040, global platinum and rhodium production will both decline sharply from current levels, while palladium production is likely to remain firm because of Russia.
That means platinum may not be able to meet the potential demand associated with decarbonization efforts in the future.
A cynic might note that the industry has a vested interest in trumpeting its value and showing shortages, which will support the price of platinum in the long run.
But it is also true that, as far as geologists know, South Africa is still a source of platinum group metals. No further parent mines are expected to be found in Malawi or Utah.
Mining is a very dangerous business in South Africa. That said, some risks have receded.
Violent labor disputes over the past decade have eased, and all of South Africa's major platinum miners have now signed wage agreements lasting five years. Social unrest and protests directly affecting platinum-group metals operations have also declined over the past few months.
But no one knows for how long, as the economy stagnates and contracts in the face of a national recession. Poverty, unemployment and rising inequality are a social combination. The future of production will be increasingly mechanized, automated, and even digital. These trends call into question predictions of job creation by platinum-group metals.
At the same time, the industry is grappling with a crime wave. Sibanye-Stillwater said its platinum-group metals business lost R1bn worth of production last year due to copper cable theft alone. All sectors of the mining industry have been looted and even extorted by organized crime groups, and executives have been assassinated. Policy uncertainty remains widespread, while the Ministry of Mineral Resources and Energy is widely seen as dysfunctional and corrupt. But at least after years of delay, the Ministry has finally begun to tender for a proper mining cadastre and licensing system.
"You must be crazy to invest in this mining sector," was the response from several overseas asset managers interviewed at the Platinum Group Metals Industry Day.
Foreign investment is crucial for South Africa's mining sector, not least because domestic savings rates remain woefully low.
There is a lot at stake here, including the potential injection of 8 trillion rand into the ailing economy. (Credit: dailymaverick)


World Platinum Investment Association


Note: The information provided here is for informational purposes only and does not represent the views of the World Platinum Investment Council and does not constitute or should be construed as the investment advice of the World Platinum Investment Council.


Note: This press release is selected from real-time industry news from foreign industry news websites and translated and edited into Chinese by the World Platinum Investment Association for your reference. In order to respect intellectual property rights, if any media want to reprint, please be sure to indicate the original source of the article and the source of the translation.
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