Modern Mining December 2022

on PGMs, will see the demand for the metals remaining strong. “PGMs will continue to play an important role in fuel cell electric vehicles (FCEVs) and the development of next-gener ation battery technology, as well as in the production of green hydrogen,” says Odendaal. According to the WPIC, the

standard junior mining team does not always have such expertise on hand,” explains Odendaal. In addition to choosing a well experienced team with knowledge of the PGM industry, the company identified key members with good governance expe rience to fill board level positions. A key challenge faced by mining companies operating in South Africa – and particularly by the junior mining sector – is the policy and mineral ten ure uncertainty that plagues the sector. “Given this policy and mineral tenure uncertainty, local mining companies are highly undervalued when compared to our international peers, often discounted to the tune of 50% and more. Unless gov ernment can provide surety to investors that South Africa is a stable environment and revise our mineral policies to become more attractive to international investors, local mining companies will have to market and promote their own companies and highlight to investors that our projects are worthy of investment.” Community participation “The Bengwenyama community, which resides on the tenement, is not just a BEE partner but a signifi cant shareholder in the project. It holds a 30% stake in the prospecting right holder (Miracle upon Miracle) and a 9,3% stake in the listed entity, Southern Palladium. Southern Palladium has a 70% stake in Miracle upon Miracle.” Despite being at an early stage of project devel opment, Southern Palladium has awarded several tenders to the community. These include a tender to fence part of the property which houses the explo ration office; provide security services; and provide electrical, plumbing, and general maintenance ser vices to upgrade a building the company uses as exploration offices. Southern Palladium’s drilling contractor and sub sidiary currently employs close to 55 people from the community, 19 of whom are female. “A commu nity member who is a junior geologist has shown keen interest in being involved in the project and has since been included in the exploration team. For Southern Palladium it is important to have as much community participation as possible.” The company ’ s r e l a t i onsh i p w i t h t he Bengwenyama community began 16 years ago, when it initiated a play to acquire the asset. PGM market outlook The global drive to meet climate change targets and the subsequent focus on clean energy, sees PGMs (platinum, palladium and rhodium), which are used in the manufacture of auto catalysts, being highly sought after. Even though legislative changes call for the phas ing out of the internal combustion engine (ICE), with the expectation that demand for ICE will decline post 2030, the move to hybrid vehicles, which also rely

primary drivers for demand emanate from the automotive sector’s demand for platinum, which is pegged at 7% p.a. through to 2026, supported by platinum for palladium substi tution in gasoline vehicles and continued steady but restrained growth in industrial demand. Industrial demand for platinum is forecast to grow by 6% p.a. through to the end of 2026. However, demand from the jewellery and investment segments is expected to remain muted. Taking a closer look at demand from the auto motive sector, which accounts for roughly 40%, the WPIC forecasts demand for platinum from ICE vehicles alone to peak in 2028, but with sustained growth thereafter due to FCEVs. “Our key conclusion is that although long-term growth in vehicle production comes only from BEV and FCEV, ICE is expected to remain a core part of the automotive landscape for some consider able time. ICE will feature in roles and regions that are unsuited to battery electrification. In combina tion with the latest emission standards, which raise loadings and especially increased platinum for pal ladium substitution in gasoline vehicles, this results in ICE-related automotive demand for platinum peaking in 2028, with further platinum demand growth thereafter as a result of FCEVs,” the WPIC said in the report. 

The recently completed Phase 1 drilling programme intersected the UG 2 reef.

Platinum market  Platinum metal is mined in four main geographies: South Africa, Russia, Zimbabwe and North America.  South Africa dominates platinummine supply, typically accounting for +/-75% of total mine supply, except for years of exceptional production disruption.  As such, small changes in output from South Africa have the greatest bear ing on variations in total platinum supply.  The main end uses of platinum have historically been split roughly one third to catalytic converters for reducing tailpipe emissions in the automotive industry, a third to jewellery and a third split across industrial demand and investment.  In recent years, the relative importance of jewellery has faded and been replaced by increased industrial and investment demand.

December 2022  MODERN MINING  21