JOHANNESBURG (miningweekly.com) – Platinum group metals (PGMs) mining company Northam Platinum has increased its contribution to the industry’s funding of the marketing of platinum jewellery.

In the 12 months to June 30 next year, its contribution will be $900 000, 80% up on the $500 000 contributed in the financial year just past. (Also watch attached Creamer Media video).

CEO Paul Dunne said Northam fully supports the marketing quest of Platinum Guild International (PGI) to boost demand in the four main markets of China, India, Japan and the US.

“All the PGM producers believe in PGI’s approach,” Dunne told Mining Weekly Online during a media roundtable.

But the tough time experienced by PGM mining in recent years has resulted in marketing budgets being reduced.

However, that is now being reversed: “Even in this difficult market, we’re prepared to apply more funds to marketing,” said Dunne.

Through PGI, the South African PGM-mining industry has been investing in platinum jewellery for more than 45 years, with current funders including Anglo American Platinum, Impala, Lonmin, Sibanye and Royal Bafokeng Platinum, besides Northam.

Since 2001, investment of $800-million in jewellery demand has created 35.5-million jewellery ounces, worth $7.3-billion.

PGI CEO Huw Daniel expressed the belief in an interview with Mining Weekly Online that with greater marketing effort in tier-three cities, China could generate  demand for at least another 3.5-million ounces of platinum a year.

In India, demand growth of 25% to 30% a year is coming off a relatively low base of 200 000 oz a year, with 500 000 oz a year in sight by 2020.

“There’s huge potential in India. We’re in about 900 jewellery stores in India at the moment. The potential there is at least 2 000 to 3 000 more stores,” he added.

“We think the penetration into tier-three and tier-four cities in China is in its infancy,” said Dunne.

Mining Weekly Online also questioned Dunne on the lack of promotion of fuel cell electric vehicles (FCEV) in South Africa, despite strides being made in Japan, Germany and California to provide the necessary hydrogen refuelling infrastructure.

“The key for the adoption of fuel cell technology is the hydrogen network that is so very important,” said Dunne, who called for the kind of holistic approach being adopted in Japan.

“It needs government policy,” he noted, adding that FCEVs have now emerged firmly beyond research and development stage into the commercial arena.

While FCEV’s can be refuelled with liquid hydrogen at refuelling stations in the same way as conventional cars fill up with petrol and diesel, to charge battery electric vehicles (BEVs) is a longer procedure, taking two minutes of charging time for every mile.

“Charging time is an inherent limitation of the application of batteries. That’s why, in our belief, we don’t believe the hype about the penetration of BEVs damaging the PGM industry.

“All other electric vehicles use the same or more PGMs. The electric vehicle is a generic. Only one part of that generic, BEVs, are the ones we should be concerned about.

“Also remember that the internal combustion engine is a very efficient, highly sophisticated piece of equipment. The development of the internal combustion engine has been ongoing for a hundred years. They’re very efficient. You can fill up your car in five minutes and travel a thousand kilometres.

“Many of the forecasts assume there’s no competitive response from the internal combustion engine. That’s simply not true. You can make a clean internal combustion engine. Just use PGMs, and this is our point.

“We believe very strongly that the application of PGMs in autocatalysis will grow, not decline,” Dunne stated.

Combine that with a declining primary supply of PGMs from Southern Africa and the gap between PGM supply and demand is poised to widen, he added.