JOHANNESBURG (miningweekly.com) – The government-backed fuel cell plant launch scheduled to take place on the sidelines of the Mining Indaba in Cape Town has important potential demand implications for South Africa’s platinum-mining industry.

With the backing of the Department of Trade and Industry, Isondo Precious Metals, headed by CEO Vinay Somera, has invested in a state-of-the-art German manufacturing plant technology for membrane electrode assembly (MEA) currently used by international manufacturing companies.

Isondo is also pursuing private sector venture capital for the balance of its funding needs through Section 12 J of the Income Tax Act, which allows investors to claim a 100% tax deduction plus a 70% broad-based black economic empowerment credit.

The company expects to be revenue generating in the next 18 months, Somera told Mining Weekly Online in an interview on Friday.

From day one, it will supply into a market that is taking off, driven by the tightening of vehicle emission legislation and the world's growing hydrogen economy.

It is positioning to produce MEA for the international market within a special economic zone (SEZ) in South Africa at lowest cost, using technology that has been developed internationally.

Targeted are the proton exchange membrane (PEM) fuel cell, which dominates the market, and the direct methanol fuel cell (DMFC).

DMFCs use the same underlying PEM membranes catalyst but the platinum content can be six times higher than PEM fuel cells as it uses liquid methanol as a fuel and not hydrogen.

The same PEM technology goes into electrolysers that split water into hydrogen and oxygen to produce hydrogen. It uses the same underlying technology as the PEM but up to ten times more platinum group metals content.

Even before fuel cells can become viable, the biggest growth industry now is hydrogen production.

It is one of the biggest growth areas in the world. Electrolysing water produces the clean, green hydrogen required from solar and wind energy.

The Americans are focusing on batteries, the Chinese on methanol and the rest of the world, led by Germany and Japan, are focusing on hydrogen.

The major Hydrogen Council was launched at Davos last month in association with diversified mining company Anglo American, the world’s largest platinum producer through Anglo American Platinum.

A collection of MEAs make up a fuel cell stack for supply to original-equipment manufacturers globally - including major car assemblers, all of which outsource components - and Isondo will supply into that value chain.

Something like a Toyota Mirai requires a 114 kW fuel cell stack, which would contain about 20 g of platinum.

The big issue is to bring down the cost of the technology to make it economically viable for the international market and, importantly, the amount of platinum used also needs to be significantly reduced in order to sustain market growth.

The two SEZs furthest developed are the OR Tambo SEZ and the Dube TradePort SEZ. It has not yet been decided which of these will be used to locate the plant, which is modular and easily expanded.

Former Daimler Benz executive director and current German Institute of Sustainable Energy head Professor Ferdinand Panik, who is advancing Germany’s fuel cell drive train programme, is due to speak at Wednesday's launch along with E4tech director Dr David Hart, a leading light in hydrogen energy technology and infrastructure.

Last year Isondo used the same venue to kick-start its feasibility study into local fuel cell manufacture, which has found that the international market is moving so quickly that the opportunity for local manufacturing is now.

The study shows that the developers of proven technology are not able to match South Africa’s lower manufacturing costs, which is the opportunity being targeted.