JOHANNESBURG (miningweekly.com) – With the price of platinum at half of the palladium price, the concept of replacing palladium with platinum in some gasoline catalyst convertors is increasingly likely to occur – but not in the very short term, outgoing Anglo American Platinum (Amplats) CEO Chris Griffith said on Monday.
Presenting Amplats’ financial results for 2019, Griffith reported a best-ever net cash position of R17.3-billion and a dividend pay-out of R14.2-billion, the highest since 2006. (Also watch attached Creamer Media video.)
Palladium set numerous price records in 2019 when it rose by an average of 48% in dollar terms and the rhodium price rocketed by an even higher 73%. Over the same period, the platinum price fell by 1%.
Benefitting the platinum group metals mining companies immensely is the diversification of their metals basket, which rose in overall price by 27% in dollar terms and 38% in rand terms.
Amplats’ overall basket revenue increased 33% in 2019 to R100-billion, with the contribution by the once-dominant platinum falling to 29%.
Palladium took the upper hand at 40%, up from 30% in 2018, and rhodium represented 18% of the revenue basket, compared with 13% in 2018.
“Overall, we see in the short and the medium term, demand outlook for the basket of metals we mine as positive across all the metals that we produce,” said Griffith during the presentation attended by Mining Weekly.
Interestingly, investment demand for platinum was exceptionally strong at 1.1-million ounces, with potential growth continuing, and jewellery demand is steadying largely on the back of market development in China and growth in India.
The drop in actual vehicle numbers resulted in automotive industry demand for platinum continuing to fall in the light duty diesel sector balanced by increasing demand in the heavy-duty market, particularly as a result of emission regulations coming out of China and India.
“In the medium term, I think the potential substitution of platinum back into the gasoline autocats will drive strong platinum demand on both automotive demand growth and the increasing loadings arising from higher emission standards.”
“Also what we will see is an increasing demand from heavy vehicles, again as a result of the vehicle numbers increasing and also increased mandatory loadings,” said Griffith.
Automotive demand is rising owing to the stricter emission legislation in many countries to get lower levels of emissions in order to mitigate climate change.
“We see the outlook in demand in the short term and the medium term as being extremely positive. It is the fundamental demand for both palladium and rhodium that has been driving the underlying increase in prices.
“The current material deficit for palladium is being sustained again this year. A larger rhodium deficit is expected again this year,” he said.