Capital Services , Metals & Mining ,


The South African platinum sector needs urgent attention. South Africa holds 80% of the world’s known platinum reserves. It employs 188 000 people and is an important contributor to tax revenue and GDP. But many mine shafts are closing and jobs being shed, as the platinum price has plummeted 40% since 2014 to below 1000 USD/oz. Both demand and supply challenges in the platinum market are to blame.

The industry has been affected by violent strikes limiting supply. This would ordinarily have resulted in a price increase, but reduced platinum demand for jewellery and autocatalysts (the two largest applications) has caused a price slump.

In 2014, a leading platinum player trying to keep its mines operating approached Bryanston to explore a long-term solution to these structural industry challenges.

With jewellery and autocatalyst demand for platinum in retreat, the industry needs a new application to grow. Mining companies are not known for innovation, so how could a mining giant unlock growth at the other end of its value chain? Bryanston set out to identify new sources of demand by identifying new PGM applications, and creating a mechanism for platinum leaders to invest in these future sources of platinum demand.

The solution was to create future demand by investing in new PGM applications. Bryanston has spotted an opportunity as the automotive industry shifts away from petrol and diesel, and drive trains are being perceived as a threat to autocatalyst and PGM demand.

Electric drive trains reliant on batteries and certain leading technologies rely on platinum. Thus, the question became, how can platinum mines support a nascent PGM-based technology to become mainstream? Bryanston scanned the venture capital market and identified hydrogenious as a high-potential technology and company.

While cutting costs is necessary for many mining companies to survive in the short-run, failing to invest in the future could cost companies and countries like South Africa, even more in terms of missed growth opportunities through innovative solutions, a giant mining company can become a champion for green-tech start-ups and invest in a better future for all.

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