Johannesburg - As the Krugerrand, the world’s most popular collectible gold coin, celebrated its 50th anniversary last week, Anglo American Platinum chief executive Chris Griffith revealed that the industry was planning to lobby the government to use platinum as a reserve currency and produce a platinum coin.
Griffith said they hoped this would help revive South Africa’s platinum industry, which was home to 80 percent of the world’s platinum reserves .
Griffith said it could also assist the industry, which was battling an oversupplied platinum market and low prices.
“We are operating in a tough environment and it is likely to be tough through until at least next year. At the current platinum price, 60 percent of the industry is loss-making,” Griffith told journalists.
Griffith, who heads the world’s biggest platinum producer, said platinum would be boosted if the country’s beneficiation strategy was followed through.
The beneficiation was intended to extract value from minerals through processes including fuel cell technology and jewellery.
“Why do we not leverage this, as the home of the world’s biggest platinum reserves, to our advantage? he asked.
Platinum, which is used in the production of catalytic converters, which limit gas emissions in vehicles, and jewellery, is in a tight spot.
On Friday, platinum traded at $766.11 (R10139) in London.
Griffith said the industry’s talk of a Mandela platinum coin had fallen through and the tough platinum environment warranted the government’s urgent intervention.
“We had the potential for fuel technology but that has gone nowhere,” he said, adding that the company would appeal to the government to market jewellery.
Head of communications at the South African Reserve Bank (SARB), Jabulani Sikhakhane, said that while previous research undertaken did indicate that platinum could offer diversification benefits to gross official reserves, there were a number of considerations that limited the inclusion of platinum as a reserve asset.
“Unlike gold, platinum is not a financial asset, thus it is not a proxy currency, it does not act as a store of value, and it is not considered a safe-haven asset in times of financial crises.
"In addition, platinum does not fall within the internationally accepted definition of central bank reserve assets,” Sikhakhane pointed out.
Apart from these factors, the usual cost and benefit considerations with regard to sterilisation costs and the potential returns that could be earned on reserve assets would apply, Sikhakhane added.
The Krugerrand was launched in 1967 and has sold more than 60 million coins over the past 50 years.
To mark the 50th anniversary, a limited-edition privy mark from the SARB has been made available from the South African Mint, said the Scoin Shop executive chairman Alan Demby.
“With a limited edition of just 1967 single coins globally, this should be the most sought-after coin to commemorate this milestone in South Africa's history. It should be seen as a collectable, long-term investment," he added.