JOHANNESBURG (miningweekly.com) – Anglo American Platinum, which is in the process of demerging from the Anglo American group, this week expressed confidence in the demand outlook for the platinum group metals (PGMs).

The Johannesburg Stock Exchange-listed PGMs company is being set free to advance unfettered as an independent pure PGMs play.

It will do so with the added benefit of a secondary listing in London and carrying with it mining, processing and marketing know-how gathered over many decades.

“What we're particularly excited about is really the demand outlook for PGMs,” an upbeat Anglo Platinum CEO Craig Miller commented to Mining Weekly in an exclusive interview, in which prime emphasis was placed on feet-on-the-ground, shoulder-to-the-wheel determination to achieve the utmost operational excellence from high calibre assets.

“Not only can we drive greater value from the current performance of our assets, but these assets also have fantastic optionality into the future, and we’re continuing to invest into this optionality in a disciplined way,” Miller outlined amid PGMs not only continuing to play a critical role in catalytic converters in internal combustion engine (ICE) vehicles and hybrid ICE plus battery electric powered vehicles, but also the far-reaching opportunities that are continuously presenting themselves as the world becomes cleaner and greener to combat climate change.

“PGMs can play a very significant part in that transition, and ultimately their utilisation in that greener world.

“That's probably more pronounced in terms of how PGMs can be used in the generation of green hydrogen and from renewable energy being converted to green hydrogen,” he said referencing the deployment of green hydrogen into many different sectors.

These sectors include hard-to-abate industries, such as the cement industry or the steel industry, but also mobility, of a heavy- and light-duty kind, utilising PGM-enabled green hydrogen powered by PGM-enabled fuel cells.

“That’s really the exciting opportunity for us. To capture a very significant portion of future demand, you would need round about one car in 10 to be a fuel cell electric vehicle car, which has no emissions, is powered by green hydrogen, and is entirely green.

“That will then result in round about six-million to eight-million ounces of PGM demand, and that, really, is just one of the applications where PGMs can be used in the future, which makes us so excited about what PGMs can bring, and therefore, the excitement around what a standalone, independent company will be once we've completed the demerger [which is expected before the end of 2025].”

Mining Weekly: Why are you optimistic that the present low price of platinum is not a long-term problem?

Miller: There have certainly been some lower price environments. Certainly, we experienced that in 2023 but I just need to take you back to 2021 and 2022 when, as a result of constraints in supply as a result of covid and the issues that we had in getting supply around the world, we had record prices for PGMs. In that environment, a lot of our customers were concerned around supply, and went out and bought additional metal. They've been working through that inventory and we think they're probably back to more normalised inventory levels, so we should see some pickup in buying of PGMs. We’re starting to see a narrowing of the anticipated surpluses in palladium and rhodium to more balanced environments, and platinum even growing in deficit. It's on that basis that I think you’ll start to see some form of price correction in months to come.

Why is the word 'hybrid' constantly cropping up in relation to PGMs and mobility?

A hybrid vehicle is probably the best of both worlds. You have a pure battery electric vehicle, which is just powered by a battery, and you have an ICE vehicle, which is powered by gasoline. A hybrid has both a gasoline engine and a battery. If you're going on short distances, you’ll probably use the battery. If you're going on longer distances, you’ll potentially use the ICE, but the user of the motor vehicle has the benefits of both. You've seen hybrid vehicles growing in their market share in the first six months. They've increased by another two percentage points in this half, so there’s a greater demand from consumers to purchase hybrid vehicles, which we're incredibly enthusiastic about, because hybrid vehicles and ICE vehicles all use PGMs as part of the catalytic converters in order to reduce their noxious emissions.

Over the course of April and May, an inflow of more than half a million ounces of platinum poured into exchange traded fund (ETF) holdings in the UK, the biggest since South Africa’s ETF initial public offering on the Johannesburg Stock Exchange nearly a quarter century ago. Is this a mere once-off?

We saw about a £600 000 increase in investments in ETFs, and I think there's a couple of things associated with that. With platinum in deficit, people see an opportunity to realise value, and so that's really encouraging. Then I think people have also started to look back and see, well, gold has rallied very extensively in the last number of months, and people are now concerned that they may miss out on the rally of the platinum price. As a consequence of that, they’ve entered into platinum ETFs quite significantly, which is great and really talks to the confidence around the outlook for platinum. We agree with that in terms of where platinum can be used, not only now in hybrid and ICE vehicles, but also into the future, as part of the energy transition.

What is your view on platinum price hedging being assisted by the decision of the Guangzhou Futures Exchange, announced during this month’s Shanghai Platinum Week, that it would be accepting sponge platinum as well as ingot platinum in futures contracts?

Any additional exchanges where people are able to trade metal is very, very positive, because it creates liquidity, it creates the opportunity for customers to be able to manage their price and their supply risk, and so we're quite encouraged by that taking place, but I think it's relatively new, and we'll just need to monitor the success going forward.

What research and development activity under way could potentially drive PGM demand further, should it result in commercialisation?

As a company, we've been involved in market development for a number of years, and we think that developing the market for the utilisation of PGMs is fundamentally important for the PGM industry, so we play a very active role, and one technology that we're particularly excited about is what we term Lion Battery. Lion Battery research work is what we’re doing with the Platinum Group Metals Company Limited. We're working in partnership with them and Florida University to test the utilisations of PGMs in a lithium sulphur battery. The early results indicate improved cost effectiveness, and better energy density, so making the batteries therefore operate for a longer period of time. We're testing at the Battery Innovation Center in Indiana, in the US. If we're able to progress that sufficiently, and to market that and put it into the commercial pathways, that could become a very meaningful demand segment for us. It will mean that we then have PGMs in ICE vehicles, hybrids, fuel cell electric vehicles, and also in battery electric vehicles – the entire spectrum and having a very significant demand segment for palladium, particularly.

What about the use of PGMs in semiconductors and medicines?

PGMs are incredibly versatile and therefore have a broad application. To your point around semiconductors, I think what is encouraging is some of the research and development that we're doing in the US, in Europe and in China. This is specifically focused on how PGMs can be used in data centres that consume a huge amount of energy to support artificial intelligence, owing to their deployment in some of the memory chips, et cetera, and networks that we have underway. So, PGMs have a broad spectrum of future demand segments, which we're quite excited about. PGMs are also used quite extensively in medical technologies. A lot of PGMs are used either in medical equipment or in, for example, medical cancer treatment drugs.

ACTION PLAN

The operational excellence initiatives that Anglo Platinum put in place at the start of the year helped it to deliver a resilient first-half performance, despite suppressed PGM price environments.

Refined production was up 5% this year and one of the smelters has been repurposed to retreat slag material, which contains PGMs and base metals and which will be able to liberate additional cash flow in years to come.

The action plan that Anglo Platinum outlined at the beginning of the year is to ensure that its business is sustainable in the current low price environment.

“We’ve been making good progress in that particular sphere, and that then setting us up to be a sustainable business into the future, generating good returns for our shareholders, but also contributing meaningfully to society.

“Linked to that is the operational excellence work that we have underway across the business in driving greater value; realising the full potential of those assets really sets us up for a successful demerger from the Anglo American group, and that process is underway at the moment. We've got teams mobilised working on that demerger, and we're hoping to complete that by the latest the end of 2025,” Miller assured.

The renewables work being done with Envusa is seen as the appropriate clean energy solution given the investment already in place in downstream processing.

The use of green hydrogen is also a future opportunity for Envusa, which could also become an exporter of green hydrogen.

The trajectory of green hydrogen around renewables has started to show thorough the investment in PGM-based proton exchange membrane, or PEM, electrolysers. Interestingly, the Shanghai Platinum Week revealed that PGMs are now also being very thriftfully used in alkaline electrolysers.

Where PGMs can be used in that sought-after greener world is extensive, and platinum producers are joined at the hip to green hydrogen as its cleanness is adopted by an increasing number of countries.