SA platinum miners not under pressure to expand amid “supply cliff” rumours

Steve Phiri, CEO, Royal Bafokeng Platinum

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.”


  1. Platinum bulls are going to get a wake-up call in the next 5 years.
    Diesel car sales dropped below EV sales in the EU27 in September last year.
    We’re going to see a shift from Range Anxiety to Resale Value Anxiety.
    Unless total car sales grow, every single BEV sale implies 6 grams of net recycled PGM’s.

    Projections for Pt demand from Hydrogen cars and the production of Green Hydrogen are premised on a static world, without continuous thrifting and where Cobalt or Nickel fuel cells and electrolysers never happen.

    The Silver bulls have been waiting for a spike in demand based on solar panels for 20 years, but every year the Silver used per Watt has declined, off-setting the growth in solar panels.

    The same pattern will play out in Pt, as R&D budgets in Hydrogen go vertical.

  2. Platinum price, I believe has the potential to go up significantly.
    My reasoning is that the Peoples Bank of China PBOC, is on the verge of launching a digital currency. It would mean any person or business with a smartphone can download an app and deal directly financially with PBOC. The entire dollar and western banking system could be bypassed. China potentially has a considerable amount of precious metal reserves, as well as large manufacturing industry. People may dump the dollar and other fiat currency which is continually being debased by quantitative easing.
    Precious metals may be seen as a much better store of value as well as China’s new digital currency.
    The fact is Gold, Silver, Platinum and Palladium prices are manipulated with non metal backed futures contracts. JP Morgan had a billion US dollar fine last year for rigging prices. One of the JP Morgan crooks was a board member on the London Bulllion Market Association.
    Rhodium has no futures contracts and has risen substantially in price. Does Rhodium represent true price discovery ? If the current futures contract pricing of Platinum fails and Platinum is regarded as a safe haven store of value, it could potentially increase in price like Rhodium or Bitcoin, in my opinion.

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