Light at the end of a gloomy platinum tunnel

Record palladium prices have lifted some of the gloom in South Africa’s platinum industry. According to Chris Griffith, CEO of Anglo American Platinum, the industry has been under pressure for the past decade due to a significant downturn in demand that has seen prices fall to all-time lows. With demand on the increase and a weakening rand, platinum producers have managed to significantly reduce the cost of production, allowing for a light to shine at the end of what has been a very dark tunnel. “The industry has had to make some tough decisions in the past few years,” said Griffiths. This included significantly reducing cost and capital expenditure.
According to Roger Baxter, CEO of the Minerals Council, an oversupplied platinum market hit South Africa hard at a time when input costs such as labour, electricity and supplies sky-rocketed
above inflation. “Recycling of the metal has also increased fourfold from around 500 000 ounces to more than  2 million, replacing
demand for mined platinum,” he said. According to Baxter the industry has seen some improvement – especially as there is a better understanding at present of the supply of platinum available. “We estimate the industry has the potential to grow total sales to $35 billion per year by 2050,” he said. “This, however, will only be achieved if investment into the sector is increased and also if there is increasing investment in stimulating global demand for platinum jewellery, improving vehicle emissions standards in the BRICS countries, encouragement of real driving emission tests on diesel cars, and continual research into new uses for platinum.”