Despite having important applications in sectors such as electronics, technology and jewellery, PGMs have faced significant challenges as a sector, which are expected to persist over the short term, Anglo American Platinum (Amplats) CEO Craig Miller says.

In a recent discussion at the Joburg Indaba on the topic of whether PGMs have a long-term future or whether they are the next sunset mining sector, he said the sector had faced a 35% price decline in 2023 owing to economic uncertainties, as well as a “choppy” transition to greener technologies.

He, nevertheless, assured market participants that these challenges were cyclical, noting that the unique properties found in PGMs, such as their catalytic properties, made them indispensable across a range of industries.

“We've been through downturns before, and each time we've emerged stronger, more resilient and more innovative, and I don't believe this time will be any different. In fact, I think we're beginning to see the early signs of a recovery,” he said.

Miller pointed out that the automotive sector, which accounted for about two-thirds of PGM demand, was showing increased demand for PGMs, particularly in hybrid vehicles and internal combustion engines (ICEs).

He explained that the short-term outlook showed a tighter supply and demand situation for PGMs, with all three major PGMs expected to be in deficit this year and at an increased level compared with 2023.

He noted that platinum was expected to remain in a substantial deficit going forward, while palladium and rhodium would be more in balance.

“While the short-term outlook may seem daunting, the long-term picture is much brighter. PGMs have a unique role to play in the transition to a low carbon, sustainable economy, and that's where I believe the real future lies.”

Miller argued that, as the world moved towards decarbonisation and away from fossil fuels, PGMs were set to become more essential.

While road transport accounted for about 10% to 15% of global carbon emissions, road transport decarbonisation was not progressing as quickly as expected. Miller noted that growth in battery electric vehicles (BEVs) posed a threat to PGMs, considering BEVs do not contain PGM catalytic converters.

However, he pointed out that concerns over the second-hand prices of BEV cars, potential subsidy reductions and charging infrastructure limitations were all dampening that demand. As a result, automakers were now cutting back or delaying their EV production plans.

Moreover, Miller noted that hybrids and plug-in hybrids, seen as transitional technologies, were proving more competitive than expected, boosting PGM demand.

He noted that, in China, plug-in hybrids and range-extender EVs have outpaced BEVs in market share growth, both in 2023 and this year.

“To me, this speaks to the crucial role that this technology must play as we transition to greener transport, ensuring that PGMs play an essential role in the automotive industry.”

Additionally, Miller posited that platinum-enabled hydrogen-powered fuel cell electric vehicles (FCEVs) were an important complementary technology that would provide resilience to the overall end mobility mix.

“We've been supporting FCEV technology for many years, and it's increasingly obvious that they will need to form part of the ultimate zero emissions transport solution,” he said.

“With about a 10% share and lower future loadings of FCEVs, we believe that will create around a six-million-per-annum-ounce demand for platinum, which is about half of the current PGM demand, which is required from the automotive sector,” he added.

HYDROGEN

Meanwhile, Miller pointed out that governments globally were also investing in clean hydrogen production and infrastructure, noting that increased electricity generation would require greater transmission and distribution infrastructure.

To support the transition of the grid from a renewables perspective, large-scale deployment of electrolysers to underpin green hydrogen production is required to provide storage and balance intermittent power generation, which also require PGMs.

Hence, PGMs are also finding new applications in the energy storage sector, whereby PGMs are being explored as potential materials for advanced battery technologies.

Miller noted that the durability, high conductivity and catalytic properties of PGMs made them promising candidates for the next-generation batteries that could store more energy and last longer than current technologies.

He added that, as energy storage technologies advanced, PGMs played a crucial role in stabilising renewable-energy grids, ensuring that energy produced by wind and solar, for example, could be used effectively.

“The potential for PGMs in energy storage is still at relatively early stages, but the possibilities are absolutely exciting,” he said.

Hence, despite challenges, Miller maintained that there were compelling growth opportunities for PGMs in South Africa and across the region, noting that the future of PGMs lay in innovation, partnerships and sustainability.

He noted that Amplats was working with innovators to develop new applications for PGMs in clean energy, medical technology and advancing manufacturing.

“PGMs are uniquely positioned at the forefront of global energy transition, driving innovation and sustainability across industries.

“They are catalysts, both literally and figuratively, for the changes the world needs to make and create a cleaner, greener and more sustainable future. At Anglo American Platinum, we are proud to be leading that change.

“We are confident that PGMs have a promising future, and we are committed to ensuring that the metals continue to play a vital role in shaping the world of tomorrow.”