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Sheets of palladiums are pictured at a jewellery factory.
China is rapidly becoming an important consumer of platinum and palladium, but it alone will not be able to compensate for the fall-out that would occur if Europe slips into a double-dip recession.
This is the view of Stephen Forrest, CEO of platinum group metals consultancy, SFA-Oxford, who was speaking at the annual Mining Indaba in Cape Town. He stressed the importance of the European automobile market to the PGM industry.
Painting an uncertain future, he said higher prices of platinum and palladium heightened the likelihood for substitution going forward. However, he said there was likely to be a supply shortfall of platinum and palladium all the way out to 2028.
“Both platinum and palladium have a robust demand profile going forward with a widening supply gap existing,” said Forrest, stressing that palladium growth was likely to outpace platinum growth 2:1 by 2018.
Commenting on the PGM industry, Forrest said there was a major problem with under-funding and under-performance at mines. This was partly due to rising costs with the business of mining “becoming tougher, deeper and more expensive.”
“In South Africa, stay in business capital expenditure dropped by 2.4 billion rand in 2010,” he said, adding that proven and probable reserves have reduced by 10% a year since 2008. “There has been a lack of investment in mines.” - I-Net Bridge
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