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Mining Weekly Editor Martin Creamer discusses Anglo American calling the global climate crisis "something that exceeds anything seen in centuries"; a call for unemployed geology graduates to capture historic exploration data; and the PGMs opportunities coming out of the hydrogen economy being compared to the 90s emissions boost.

Mining investment firm Menar has officially launched its first-to-portfolio manganese mine, East Manganese, in Hotazel, in the Northern Cape.

MD Vuslat Bayoğlu expects the mine to produce its first ore in July and to ramp up to nameplate capacity of processing 30 000 t a month of ore by August.

The 900 000 t reserve will be mined over a two-year mine life, as a starting point for the company to build expertise in the manganese mining space.

The mine comprises a single, 14 ha openpit operation, which is located on a 43 ha portion of the bigger 1 000 ha mining right area.

The R250-million project will produce mostly lumpy manganese and some fine material for export to the Chinese market.

A dry crushing and screening plant will be commissioned over the next few weeks on site, which will greatly contribute to ensuring the mine’s water use efficiency.

Bayoğlu says Menar also has markets for manganese in India and Europe, but most of the product goes to China owing to its significant steel production activity.

He adds that demand for manganese is strong at the moment, despite the price not necessarily being that high.

In terms of export logistics, Bayoğlu confirms that State-owned freight utility Transnet is struggling with some rail capacity challenges at the moment, but Menar nonetheless applied for a Manganese Export Capacity Allocation 2 (Meca 2) allocation.

Under Meca 2, 15% of Transnet’s manganese rail capacity is allocated to new entrants in the manganese export market.

“We are aiming to truck the product to a neighbouring mine site and rail from there, but while we await Transnet’s approval of our application, we will truck product to the port.”

With the mine producing 30 000 t of manganese a month, the company is considering building a small-scale power plant, coupled with grid power and back-up generators, to meet the mine’s 1 MW power capacity requirement.

Bayoğlu concludes that the company’s decision to diversify the Menar group’s commodity portfolio is in keeping with the firm aspirations of becoming a leading South African diversified mining company.

The company is looking to invest in more manganese assets and discussions are underway for assets in this regard, which the company will share in due course.

Menar is an active private mining investment company with interests in thermal coal, anthracite and manganese assets in South Africa, a nickel/cobalt asset in Turkey and a gold asset in Ala-Buka in Kyrgyzstan.

JOHANNESBURG (mingweekly.com) – Recent generations have defined the environment as a critical issue for humanity and climate change represents a new and sharper focus that exceeds any single global issue “that we’ve seen in centuries”, Anglo American CEO Mike Cutifani has told the Bank of America Securities Global Metals, Mining and Steel Conference.

Moreover, when viewed in the context of the Covid-19 pandemic, the fragility of the human species becomes an even more compelling case, Cutifani said in his presentation covered by Mining Weekly.

“For us as an industry, the transition to a decarbonised society ­– and what that means for both demand and supply for our products – becomes the defining issue of our time.

“At Anglo American, we will be part of the solution, we will provide commodities necessary for that transition. We’ll fulfil our obligations in a responsible way while ensuring that we make a real difference within the local communities that we partner,” Cutifani said.

While mining’s physical footprint was a small 0.04% of global habitable land, compared with the 50% agricultural footprint across the globe, mining’s commodities were absolutely key in decarbonising energy and improving the environmental footprint right across the globe – “and that includes increasing biodiverse areas”, he added.

“For us sustainability in every sense of the word provides us with a platform to improve our long-term value proposition.

“We’ve got a broad portfolio of assets and new opportunities that we’ve developed and we're thinking for the short-, medium- and the longer term.

“Within the context of our purpose to reimagine mining to improve people’s lives, we believe the delivery of sustainable returns to shareholders, employees and societal stakeholders is an imperative that will define the long-term success of our business.

“In defining what we need to deliver, we’ve been crystal clear. In talking to shareholders, we target a better-than-ten percent pre-cash flow yield on capital employed through the price cycle as the prime measure of our effectiveness as business managers.

“Obviously, we’re going to do a hellova lot better than that this year. To measure our efficiency in delivering those cash flows, we also aim to deliver better than 15% return on capital employed, again through the price cycle, and we’ll do a hellova lot better than that as well this year.”

He said Anglo measured sustainability across seven pillars, which included safety and health, environmental, social and governance (ESG), productivities per person and competitive cost and capital measures.

“We believe that in the last 12 months, we’ve again overtaken our major competitors in terms of our aggregate cost position across all of our commodity positions so that our margins are continuing to grow and today we are the most competitive of the major miners across the sector.

“This is what we think about when we come to work every day and our purpose and ambition drives our strategy and its execution. Our portfolio is now focused on quality assets with a continual tilt towards future enabling commodities,” Cutifani said.

“We think the mining industr,y and we as a company, are perched on the edge of quite a material opportunity.

“In the shorter term the world has stimulus packages estimated at between $10-trillion to $20-trillion over the next ten years, many of which are focused on metals-intensive infrastructure.

“We also face growing population over the medium to longer term that will need food, energy and shelter. The middle classes will grow and associated wealth effect will reach an even larger and more diverse population pool,” he added.

FUTURE ENABLING PRODUCTS

Sixty five per cent of Anglo’s portfolio by value and over 90% of its growth capital is on future-enabling products. The other 35% is its high-value-in-use iron-ore and metallurgical coal assets.

“Our integration with our ESG strategy is unique in the industry and its evolution has taken us past our com...

The mining industry has a role to play in sustainability and mining companies have the potential to become leading partners in achieving the United Nations’ (UN’s) Sustainable Development Goals (SDGs), especially with environmental, social and governance (ESG) becoming ever more imperative.

Speaking on day two of Smart Procurement World’s Sustainability Summit Africa on May 19, diversified miner Anglo American London international government relations head Richard Morgan noted that there was a need to improve accountability, with external expectations requiring that mines take a clearer public position on key societal issues.

He noted that the Covid-19 pandemic had amplified this, with mining classed as an essential service. The mining industry had been challenged to show it could help address systematic underlying issues such as inequality and building inclusive economies, which were brought to the fore during the pandemic.

Therefore, while ESG movements were becoming mainstream before, this was now accelerating, he said.

With regard to society, he highlighted that the future of work, the Fourth Industrial Revolution (4IR) and remote working has pressed Anglo to become more systematic, strategic and holistic in its approach.

With regard to the environment, the pandemic showcased the need for greater eco-sensitivity with regard to finite resources; and for more forward positions on climate change, a circular economy, water and biodiversity, noted Morgan.

He said the rush to electric vehicles and renewable energy solutions meant that the company was investing to be a part of this new green economy.

With regard to governance, Morgan said the company needed to be a good corporate citizen and to participate in a wider agenda where mutually agreed policy formulation, open disclosure, rule of law, capacity building and leadership development were pivotal.

One of the tools to engender sustainability globally is pursuing the UN SDGs. Morgan said government resources were increasingly becoming stretched to achieve the SDGs and that companies should be encouraged to contribute to reaching the goals.

He said Anglo was conscientious of the SDGs and that it assessed its own footprint against these. The company’s sustainable mining plan, launched in 2018, had incorporated SDG inputs.

Therefore, achieving and moving forward on SDGs was integrated into the company’s mining plan, he noted.

The company’s plan is built around three major areas, or global sustainability pillars, aligned to the SDGs, and it has a set of global goals relating to each of these.

Morgan said that, in implementing this plan, 14 SDGs were brought to the fore.

Firm DBK Advisory South Africa cofounder and director Aiden Choles , meanwhile, said that, in aiming to meet the SDGs and other new-era requirements, mining companies had to balance keeping the core of the business together, while aligning with increasing expectations from society and stakeholders, all within the context of local needs.

He said there was a business case to undertaking this, such as reducing performance risk exposure and an opportunity to look differently at solutions and processes.

JOHANNESBURG (miningweekly.com) ­– A strong call for unemployed geology graduates to be contracted to capture historic exploration data electronically has been made by Letaba Elihle Investments (LEI) principal geology consultant Siphelele (Siphe) Ntshangase .

In a Zoom interview with Mining Weekly Ntshangase also called on South Africa’s Department of Mineral Resources and Energy (DMRE) to:

revamp and modernise exploration policies; create an environmental rehabilitation fund for junior miners; develop a free and transparent ‘open-file’ database of geological information; lower prospecting right application costs to a level that encourages juniors to engage in the greenfield exploration so desperately needed; urgently complete the upgrading of the Samrad cadastre system, or replace it with a modern and transparent mineral cadastre; double the 5 ha limit on mining permits to 10 ha to ensure optimal exploitation at reasonable cost; partner with professional service providers to help juniors navigate compliance processes on a consultative basis, at affordable rates; simplify early-stage exploration permitting via a ‘tick-box’ and ‘one-stop-shop’ approach; establish a dedicated junior miners’ desk at each regional DMRE office to speed up approvals; and solidify regulatory certainty.

LEI Advisory is a South Africa-based black women-led and women-controlled technical and management advisory firm, which has a primary focus in the resources sector and which is built on an owner-operator model. (Also watch attached Creamer Media video.)

Ntshangase emphasised that the funding needed for prospecting rights is currently well beyond what juniors can afford, which is worsening the serious backlog of greenfield exploration at a time of mine life decline.

“We need to find a fit-for-purpose approach without impacting on the environmental social and governance or ESG aspects,” she said, adding that a support mechanism could be an Environmental Rehabilitation Fund, with qualifying participants using the fund to provide the required guarantees.

Ntshangase suggested that the DMRE and the mining industry work together to create such a rehabilitation fund for juniors.

NEED FOR HISTORICAL DATA CAPTURE

Ntshangase urged that greater recognition be given to geologists and the contribution that they can make to the South African economy.

She spoke of South Africa having highly-experienced geologists with great South African insight, who could work with the government to develop a database which the large number of unemployed geologist graduates could help to develop.

The initiative, she said, could create graduate employment “and on the way they will also be learning what is part of our history of geology in South Africa”.

“If you just go to LinkedIn and you look at how many geology graduates are looking for employment, it’s crazy, and the worst thing for graduates is not being able to get a job after graduating,” said Ntshangase.

ACCESSIBLE DATABASE

South Africa is suffering a major mineral exploration and mining rights backlog, which, when last reported, stood alarmingly at more than 5 000 unprocessed exploration applications and 235 unprocessed mining right applications. On the Samrad issue, Ntshangase reiterated the urgency: “They need to act on it now.”

WHY HECTARE LIMIT NEEDS INCREASING

Ntshangase decried the 5 ha limit on mining permits, which she said needed to be at least doubled to allow bulk commodities and tailings dam recovery projects to be optimally worked without being constrained by off-putting costs, brought about by having to apply for more mining rights to access the additional area required to do the job. “It just becomes a nightmare for juniors,” she said.

DEDICATED JUNIOR MINERS’ DESKS

Dedicating a unit within all regional DMRE offices is seen as a way of avoiding delays, the consequence of which often results in juniors having their funding withdrawn.

“Juniors end up losing their funding because of the long time that it takes f...

Disruptions brought about by the onset of the Covid-19 pandemic in South Africa early last year resulted in the mining industry being the largest contributor to economic decline with its negative growth of 21.5%, Minerals Resources and Energy Minister Gwede Mantashe said on May 18.

Presenting his budget speech, he said the South African economy experienced its worst economic recession on record in 2020.

“This was [also] the biggest slump in the past six years in the sector and was attributed to supply and demand disruptions as a result of hard lockdown . . . The second quarter saw a sharp economic decline at 51% with mining contracting by 73.1%.”

However, during the lockdown, Mantashe said, the Department of Mineral Resources and Energy (DMRE) had developed a number of interventions to help revive the economy.

Among these interventions were the DMRE’s permitting of all coal mines and refineries to continue operating at 100% during Alert Level 5 to avoid a shortage of coal supply to power utility Eskom and to enable continued supply of energy into the economy.

Not doing so, would have “plunged the country into darkness”, he said.

In addition, during Alert Level 4, the DMRE permitted all opencast mines to operate at full capacity, while the remainder of mines were permitted to operate in a phased in approach, while beneficiation plants operated at full capacity with stringent health and safety measures in place to ensure that we protect livelihoods while saving lives at Alert Level 3.

The outcomes of these interventions manifested in improvements in gross domestic product (GDP) in the third quarter of 2020, with GDP readings registering a recovery of 66.1%, indicating a softer contraction of 6%.

Further, in the third quarter, Mantashe says mining and quarrying registered a growth rate of 288%, contributing 11.8 percentage points to the overall GDP.

This made mining and quarrying the third-largest contributor to the GDP during the third quarter.

“We are pleased with . . . positive signs that mining is showing in our economy as it registered a 21.3% year-on-year growth in March, following a 0.8% year-on-year growth in February.”

He adds that, sales of minerals increased by 46.9% in March, following a 25.4% increase in February.

“This performance is a confirmation that mining remains the bedrock of our economy and that our interventions are yielding great results in the economic reconstruction and recovery journey.”

IMPEDANCES

However, although international resource prices are higher than they have been for the past nine years, the South Africa mining sector is still being hampered by an environment that is not friendly to investors, opposition party the Democratic Alliance MP James Lorimer said during the debate on the DMRE's budget.

He said the effect of global prices concealed rather than revealed what was happening in South African mining. This was evident through 42 new mining companies having listed on the ASX and 28 in Canada; yet none have listed in South Africa in the past 12 months.

“One of the prime dissuaders of investment is the onerous prescriptions of the Mining Charter. We are awaiting the court judgment on [some of aspects of Mining] Charter 3,” said Lorimer.

Further, he said the government’s idea that a mining right renewal must be treated as an entirely new application and go through an entirely new empowerment process is “laughable”.

Lorimer questioned why other countries were benefiting from another mining boom cycle, which he suggested may even repeat the mining supercycle of the early 2000s. “We missed that supercycle, with our mining actually shrinking during that time. All evidence is, we’ll miss this one too.”

Lorimer said South Africa would fail in its ambitions to create new jobs and add revenue because “the African National Congress never learns and we still have bad policy badly implemented”.

He suggested that the government had to change policy and give the DMRE a job it was capable of doing. “The...

JOHANNESBURG (miningweekly.com) – The advent of the hydrogen economy is providing an opportunity for platinum group metals (PGMs) similar to what occurred in the 1990s when the PGMs market faced a structural boost driven by stringent emissions regulations, Sibanye-Stillwater COO Richard Stewart said on Tuesday.

Particularly for the hydrogen economy, the alignment of the PGMs producer basket with PGMs demand is absolutely critical for the sustainability of PGM end uses, Stewart said in a video presentation covered by Mining Weekly.

On balancing the demand-and-supply baskets and aligning PGMs output to match the needs of emerging end-use technologies, Stewart emphasised that future demand needed to be more aligned with the optimal supply ratios of the PGM metals mined, which would ensure a less volatile and more sustainable basket value.

Fostering strategic partnerships with end-users, fabricators and catalyst manufacturers would make this possible and allow PGM portfolios to be built to ensure the provision of PGMs needed within an extended time frame.

“The PGM demand mix has been out of kilter with supply, which has led to sustained palladium deficits and the current rhodium shortages and the supply chain must work together to ensure that investment is made today, to secure the metals required for the future,” he said.

What made PGMs unique were their chemical properties – relating to corrosion resistance and oxidation resistance, biocompatibility and high melting temperature – good conductivity, electronic properties and catalytic properties of auto catalysts, jewellery, medical, glass and electronics.

PGMs, he emphasised, could often be substituted by other PGMs to a greater or lesser extent, which was advantageous because PGMs were mined in a basket, with specific PGMs unable to be selectively extracted.

Questioned on the steps that should be taken to assure the supply of iridium for proton exchange membrane (PEM) electrolysers earmarked for the generation of the green hydrogen that the world is demanding and give confidence to end-users, Stewart responded by saying that it was important at this point to distinguish between prices driven by short-term volatility supply crunches and really look at the longer-term strategic view.

“We really need to work together with the people that are going to be manufacturing electrolysers in the long term to co-develop that technology and understand the needs and requirements and in that way ensure that we have the ability to supply those metals,” Stewart said.

“In the longer term, prices will ultimately be driven by total supply and demand needs that will be influenced by the cost of production and the benefits of the final products that are being produced. But if we can align those supply and demand needs, users will at least be assured of security of supply and be able to manage their own forecasts better,” he added.

Questioned further on whether the growing appreciation of consumers for greener PGMs from recycling could expect to attract a price premium over primary supply, Stewart described recycling as being far more preferable to the green economy than hard-rock mining. However, primary supply would always be critical owing to PGMs first having to be mined before they could be recycled.

“Where I would say recycling is also going to become increasingly, though, is when we do look at the minor metals, which have small markets, like iridium. Primary supply of iridium today is only about 270 000 oz. That’s a tiny market relative to most metals and if we are going to be able to produce steady supply for what the market is demanding, closed-loop markets and the recycling of those metals and thrifting is going to be a critical part of securing the overall balance.

“In terms of potentially attracting premiums through recycled PGMs, I certainly do think that is an opportunity. It is not one that is being specifically supplied at the moment. The entire supply chain is very sensitive towar...

JOHANNESBURG (miningweekly.com) ­– Seriti Resources, which will take over South African Energy Coal (SAEC) from South32 on June 1, is particularly excited about the opportunity as the Seriti group to start now exporting coal in addition to continuing to support coal flows into Eskom.

“We note that Asian demand for South African export coal remains strong,” said Seriti’s Doug Gain , who led the transaction.

Expressing this view during a media conference covered by Mining Weekly, Gain outlined the Seriti view on the impact on coal of environmental, social and governance (ESG) principles now being enforced across a broad global front.

“We do believe that the various headwinds that thermal coal faces from an ESG perspective are likely in the medium term to create a shortage of supply potentially, which we believe could very well be price supportive in the medium term.

“We, in fact, are fairly bullish about the export fundamentals of South African export thermal coal, particularly going into the Asian markets. So, that’s an exciting nuance that we now have exposure to from an earnings perspective – low-risk Eskom earnings on the one hand, largely from cost-plus mines, and then the risks and rewards of the export price on the other hand,” said Gain, who added that Seiti would be ranking and prioritising attractive growth options within its portfolio.

SAEC supplies most of the 2 875 MW power station’s coal requirements from the Ifalethu operation. Seriti has been operating New Vaal, Kriel and New Denmark collieries and has a project at New Largo, acquired earlier from Anglo American. Negotiations with Eskom commenced in August 2018 on the development of the New Largo resource, which will be developed in three stages with the objective to meet the Kusile power station ramp-up requirements as far as practically and commercially possible.

Gain described the New Largo project as perhaps the company’s best growth option, where mining had already begun and discussions with Eskom were continuing to be advanced with a view to supplying coal to Eskom over the long term.

“So, that remains very important for us because strictly speaking, it’s not a rebadging of existing mines and ownership, it’s in fact genuine, organic, incremental growth, with new jobs and new opportunities, all of which we’re particularly excited about.

“We know that Eskom has continuing challenges at Kusile power station and we’re watching those very, very carefully, but we do believe in the medium to long term that New Largo will indeed remain the underpin as the adjacent coal resource, to fuel that power station for the bulk of its life,” Gain added.

Regarding Eskom’s confirmation of its improved Duvha coal supply agreement, or CSA, to facilitate the sale of South32’s majority shareholding in SAEC to Seriti, Seriti CEO Mike Teke said in reply to a journalist question that the supply from Duvha to Eskom would be 7.5-million tonnes a year until 2024.

Gain explained that the higher price of R550/t was arrived at pursuant to an in-depth extensive, independent due-diligence exercise that was performed by Eskom consultants, who were of the view that R550/t renders the Ifalethu mine to be at break-even level to ensure the sustainability of supply into Duvha power station until December 31, 2024, whereupon that contract will cease.

The volume requirement for Duvha had also been reduced pursuant to that power station not actually requiring the full 10-million tonnes of coal a year that Eskom had originally contracted SAEC at, according to information given to Mining Weekly, at R280/t for another 13 years to 2034.

“What you will see is the annual volume obligation or entitlement, depending on how you see it, the delivery obligation or entitlement, for the next three-and-a-half years is going to be the equivalent of 7.5-million tonnes of coal a year, delivered across the pay scales into Duvha power station, at that revised, what we call break-even, price (of R550/t),” Gain explai...

The platinum market is forecast to move back into surplus this year, despite a 27% gain in autocatalyst demand, according to estimates published in chemicals company Johnson Matthey’s latest platinum group metals (PGMs) Market Report.

South African platinum supplies are expected to rebound by nearly 40%, as Covid-19 disruptions subside and backlogs from processing outages in 2020 are treated, the report notes.

Higher prices are hitting investment, with Japanese bar buying turning negative in early 2021 and exchange-traded fund (ETF) buying subdued. Chinese retailers stocked up on platinum jewellery in the second half of 2020, but the recovery has stalled owing to a narrowing discount to gold, the report indicates.

It notes that the palladium and rhodium markets will also remain in deficit this year.

Both metals recorded all-time high prices early this year, with palladium climbing above $3 000 and rhodium repeatedly surging to $30 000.

In response, automakers have accelerated thrifting and substitution programmes, seeking to reduce the use of these metals in gasoline autocatalysts. Despite this, both palladium and rhodium will see double-digit growth in automotive demand this year, as vehicle output rebounds and major markets phase in tighter emissions regulations and more stringent test procedures.

“The overall PGM content of catalyst systems is still rising, in line with tightening emissions legislation in many regions, and the implementation of real driving emissions testing in Europe.

“This is supporting palladium and rhodium demand, despite aggressive thrifting and substitution programmes at virtually all global automakers.

Meanwhile, platinum’s share of the auto PGMs mix is rising and demand for platinum in gasoline cars will climb steeply in 2021, albeit from a low base. Platinum will also benefit from the phase-in of China VI emissions legislation. Meeting China VI limits requires a complete overhaul of heavy-duty diesel catalyst systems and we expect PGM loadings on Chinese diesel trucks to more than treble this year,” says Johnson Matthey market research director Rupen Raithatha .

Mine supply of PGMs is forecast to recover strongly this year, despite the temporary closure of two Russian mines owing to flooding.

Shipments of PGMs from South Africa will be augmented by the refining of a backlog of about one-million ounces of PGMs that accumulated during processing plant interruptions last year, the report says.

It notes that strong prices will incentivise increased recycling of PGMs from scrapped vehicles, but platinum recoveries will be constrained by technical difficulties in the treatment of diesel particulate filter scrap.

The ‘minor’ PGMs, ruthenium and iridium, have seen steep price gains early this year.

This reflected robust industrial buying, disruptions to South African supply and rising investor awareness of the potential for PGMs use in hydrogen applications, the report says.

Johnson Matthey’s PGM Market Report includes a special feature entitled ‘Green hydrogen for a net zero future: What role for PGMs?'

“Net-zero commitments made by the UK, the European Union, China and, most recently, the Biden administration in the US, will require much greater use of hydrogen as an alternative to fossil fuels and PGMs will play an important role in the hydrogen economy.

“We are already seeing strong growth in demand for platinum in hydrogen fuel cells for stationary and transport applications. In future, we expect to see wider use of PGM catalysts to produce green hydrogen using polymer electrolyte membrane electrolyser technology.

“Although it is early days for the clean hydrogen sector, it is already starting to shift sentiment towards PGMs, particularly platinum and iridium,” said Johnson Matthey principal analyst Margery Ryan .

As the global economy continued to recover, boosted by widespread stimulus measures, demand for platinum increased by 26% or about 405 000 oz year-on-year to more than 1.9-million ounces in the first quarter, the World Platinum Investment Council (WPIC) notes in its latest ‘Platinum Quarterly’ report.

For the fourth consecutive quarter, platinum posted a small deficit of 19 000 oz in the first quarter, as strong industrial, automotive and jewellery demand and sustained investment demand for platinum outstripped recovering but constrained supply.

WPIC research director Trevor Raymond notes that the “once in a lifetime fiscal stimulus programmes put in place by multiple governments to try and get economies out of the hole caused by the Covid pandemic” resulted in significant spending, which reached all areas and prompted the growth in demand seen in the first quarter of the year.

Demand for platinum in the glass sector also contributed, with anticipated growth of 70% year-on-year likely this year as the demand for flat screens increase, while decarbonisation efforts and the goal to insulate buildings better continue.

“A lot of glass fibre is going into building insulation and there have been significant increases in the capacity for glass and glass fibre production, particularly in China.”

A change in personal income and an increased motivation to drive own vehicles, owing to the risk of infection on public transport, as well as a long delay in fleet adjustments during 2020, also impacted on demand.

There has been a 16% increase in the first quarter in vehicle production, despite a shortage of microchips, while the increased certainty of the hydrogen economy and decarbonisation, have also influenced expected growth in platinum demand.

Meanwhile, following the effects of operational shutdowns and Covid-19-related restrictions in 2020, greater output from South Africa, an increase in production from Russia and growth in recycling, resulted in platinum supply increasing by 11% or about 187 000 oz to more than 1.9-million ounces in the first quarter.

While total supply is forecast to rise by 16% to 7.8-million ounces in 2021, this is still some way off levels seen pre-pandemic (8.2-million ounces in 2019).

The demand for platinum is also expected to increase by 5% (378 000 oz) to just over 8-million ounces, with 2021 set to generate a deficit for the third year running of 158 000 oz.

INDUSTRIAL DEMAND

Industrial demand in the first quarter was 44% (201 000 oz) higher than in the first quarter of 2020, and was underpinned by a six-fold increase in demand year-on-year from the glass sector to 279 000 oz.

Glass demand is forecast to increase by 70% in the next year, as demand growth for use in screens and building materials is met by capacity expansions, mainly in China.

The improvement in economic activity will see demand for platinum in industrial applications increase by 25% (486 000 oz), the WPIC says, with notable increases in demand from the chemical (11% or 62 000 oz) and petroleum (65% or 71 000 oz) sectors.

The ‘other’ industrial segment surged by 23% (27 000 oz) in the first quarter and is expected to grow by 17% (85 000 oz) in 2021 and includes growth in automotive (for use in spark plugs and sensors) and the green hydrogen industries (increased stationary fuel cell deployment and early production of green hydrogen from renewable electricity).

Automotive demand is forecast to exceed 2019 levels, despite supply chain curtailment, which the WPIC said is “testament to the strength of the recovery”, as higher vehicle production and tighter emissions regulations contributed to an 8% (50 000 oz) in automotive demand for platinum in the first quarter, despite production being undermined by semiconductor shortages and a tightening of lockdown measures in some regions.

North America, in particular, saw platinum demand increase by 12% (10 000 oz), helping to offset declines in other parts of the world.

In China, burgeoning vehicle ...