Modern Mining April 2022

COMMODITIES OUTLOOK

A golden decade ahead for South African PGM miners By Pearson Mururi, Afriforesight’s Head of Precious Metals and Related Commodities South African platinum group metals (PGM) producers are awash with money and they might as well get used to it. The expected revival in platinum prices due to substitution in place of palladium, future demand from development in hydrogen economy and the limited potential for increasing near- to medium term supply should usher in a golden era.

P latinum group metals are rare and mostly valued for their catalytic properties, which are useful in many industrial applications, with demand strongly focused on the man ufacturing of autocatalytic systems to reduce harmful emissions from vehicles. The metals are found together in ores and significant volumes are mined in only five countries: South Africa, Russia, Zimbabwe, US, and Canada. South Africa hosts more than 80% of global reserves and is the larg est overall producer. The platinum group metals consist of palladium, platinum, rhodium, ruthenium, iridium, and osmium. However, platinum is the most famous metal because of its use in jewellery and its investment pull as the metal is considered a viable alternative to gold as a store of value.

South African miners primarily target three types of ores which contain PGMs, namely the Merensky, UG2 and Platreef ores, the latter of which has almost an equal ratio of platinum and palladium while the other two have a higher platinum ratio. The UG2 and Merensky ores host high grades of rhodium and the other minor PGMs (excluding osmium) making South Africa the world’s major source of the minor PGMs, accounting for about 80-90% of global production. The South African PGM industry struggled for most of the past decade due to low platinum prices and industrial action by workers. This led to the closure of some mines and a general lack of investments. However, fortunes turned as tighten ing vehicle emissions standards in key economies – which required more advanced catalytic systems

Platinum group metals are rare and mostly valued for their catalytic properties.

18  MODERN MINING  April 2022