Global platinum production is expected to recover by 21.9 per cent in 2021 after a steep decline in 2020, according to GlobalData.
This is sustained by the recovery in the automotive and jewelry sectors, having translated into a rise in demand for platinum production, which will reach 6.03 million ounces (moz).
Among the sectors that were seen to demand the highest in platinum was the automotive sector with growth of 27.1 per cent. “This was largely used for manufacturing autocatalysts, a system built into car exhausts that reduces dangerous exhaust pollutants,” Vinneth Bajaj, Mining Analyst at GlobalData said.
However, the growth in demand of platinum is expected to slow between 2021 and 2025, expanding at a compound annual growth rate (CAGR) of just 2.2 per cent due to the gradual replacement of internal combustible engine (ICE) cars with electric vehicles (EVs). The other key contributor to 2021’s platinum recovery was Jewelry fabrication, with demand growing by 5.3 per cent.
Research by GlobalData has identified South Africa as a key contributor towards platinum production recovery, which represented 72 per cent of 2021’s production. This was followed by Russia (10.4%), Zimbabwe (8.2%) and Canada (3.9%).
Platinum’s recovery in 2021 will largely rely on increased production in South Africa, the world’s biggest platinum producer, which is expected to achieve a 34.7 per cent rise in output by the end of the year, Bajaj indicated.
Over the previous year, the impact of the COVID-19 pandemic has been huge, as the country’s platinum production was affected as a result of the associated COVID-19 restrictions, particularly during the second quarter of 2020 when strict lockdown measures were enforced across much of the world.
However, global vaccination program alongside recovering automotive demand is expected to leverage South African production base, Bajaj said.
Platinum output successes across the world
Other success stories include that of the world’s largest producer of platinum, Anglo American. The company increased production of platinum and other platinum group metals by 17 per cent in 2021 to 3.2 million ounces, compared with 2.73 million ounces output in the same period last year.
“Anglo American’s gains were largely due to more stable output from its Anglo Converter Plant (ACP) phase A plant, following an explosion in February 2020.”
Vinneth Bajaj, Mining Analyst, GlobalData
Globally, 43 platinum projects are currently under development– of which six are under construction. According to GlobalData, key upcoming projects include the Platreef (production expected to start in 2022) and Bakubung (2022) in South Africa; the Darwendale (2022), Mupani (2025) and Karo (2022) in Zimbabwe; and the Bamboo Creek (2023) in Australia.
“These projects are expected to add around 600 thousand ounces of platinum production capacity to the global total, and are expected to be operational within the next four years.”
Vinneth Bajaj, Mining Analyst, GlobalData
Despite these positives, there are some downside risks. The Omicron variant poses growing threat to platinum’s sustained recovery in the coming year, owing to the renewal of restrictions among countries to limit the spread of the virus. This raises concerns about whether the world is likely to witness a 2020 styled lockdown or not.
Already, South Africa has been hit severely by this new variant, and the effect thereof may be devastating for the country’s platinum production in the coming year.
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