ROYAL Bafokeng Platinum CEO, Steve Phiri, has dismissed concerns over the ability of South African platinum group metals (PGMs) producers to meet future demand for platinum which could soar if there is widespread implementation of the “hydrogen economy”.
Speaking on a panel discussion covering ‘Green metals, PGMs and global decarbonisation’ at the Investment in African Mining Indaba, Phiri said: “The hydrogen economy is the future. If you do not believe in the hydrogen economy and you are in PGMs then you are in the wrong industry.
“The question is: can we supply the market as we see it growing? I think we can. We have always been reliable as South Africa even during the difficult times of strikes and operational interruptions.
“No individual customer can ever tell you that South Africa ever dropped him and did not deliver the ounces required.”
But Phiri stressed the South African platinum mining industry would increase output as it saw rising demand actually materialising, and added “at this stage, we don’t see much growth taking place although the potential is there.”
“We will grow as the world demands PGMs and – once there is certainty – then we can go to our boards with business plans that are commercially sound and then our boards will approve further growth.”
Phiri said he saw no sign of the looming “platinum supply cliff” that some analysts were sounding warnings over. “I think what we are supplying to the market is sufficient that the market can take at this stage.
“I know it takes time to introduce new supply and ramp it up but the market is not yet there. The world has been slow in developing hydrogen economies. We want to see those signs because we don’t want to invest in anticipation of something that is not yet concrete.”
Adrian Hammond, an analyst for SBG Securities, said there was no option but to be “pro-PGMS” for the next five years owing to the contribution of the metals to decarbonisation.
“Rhodium is in structural deficit and there is no real alternative to rhodium in the short to medium term to meet new stringent emissions regulations,” he said.
Platinum is in surplus at present, but on our analysis, it shifts to deficits from 2025, not because of demand but simply because of supply.
“Then you look at the outlook for hydrogen and I have seen some crazy numbers out there as to what hydrogen could contribute to platinum demand,” he said. “Companies like Amplats will look at how they are going to fill that gap because I cannot see it coming from other projects like Wesizwe or Ivanplats.
“I think a lot of reserves sitting on the Western Limb (of the Bushveld Complex) will need to be mined to facilitate those deficits.”