Given South Africa’s prominence as a primary producer of platinum globally, South African refiner Metal Concentrators (MetCon) says the country is presented with a “distinctive opportunity” to capitalise on various stages of the platinum group metals value chain.

“As international regulatory bodies increasingly emphasise known and traceable supply chains, we anticipate a sustained rise in interest for South African platinum products, including alloys,” the company notes.

This aligns with the growing emphasis on encouraging source identification for precious metals, which will further position the country to capitalise on its “unique strengths” in the platinum industry.

For MetCon, platinum provenance is also a measure to ensure that industry players work with a vetted and verified supply chain in which all role players and practices have assurance on the companies involved in the supply chain and the source of metals.

Platinum Importance

While recognising the potential of platinum provenance, MetCon acknowledges that not enough effort has been dedicated to driving the marketing thereof.

The importance of transparency and ethical sourcing is gaining momentum, particularly among new generation consumers and regulators. South Africa, as a platinum producer, bears the responsibility of driving awareness about platinum provenance.

In certain markets, such as the US, historical challenges in obtaining platinum with sound provenance may have led the market down a path of preferring recycled platinum.

Although making use of recycled platinum is of interest from a sustainability perspective, MetCon adds that “it does have challenges around certifying the underlying source of the material”.

While recycled precious metals offer various benefits to the world, as a country with platinum at the core of our economy and readily available, we should actively promote the numerous advantages of using mined platinum.

Building transparent supply chains for beneficiated products into international markets is a challenging endeavour that requires time, capital, networks and a certain level of bravery, notes MetCon, adding that it is important to emphasise that the market is available for South African businesses to access, and overseas buying behaviour is not the primary obstacle.

According to MetCon, aligning with the historical significance of mining in the country’s economy is critical. The complexities and higher costs associated with recycling platinum further contribute to its elevated market value.

Unlocking Potential

The intersection of platinum provenance and beneficiation presents challenges and opportunities for South Africa; this entails navigating complex international markets, building transparent supply chains and promoting platinum provenance as some of the essential steps to unlock the full potential of the platinum industry.

In aligning with global trends favouring transparent supply chains, MetCon suggests that South Africa should harness regulatory momentum and trade opportunities, such as the African Growth and Opportunity Act (Agoa). Agoa enables eligible sub-Saharan Africa countries to access the US market duty free, consequently fostering the development of a platinum beneficiation industry within South Africa’s borders.

Meanwhile, MetCon says there continues to be debate surrounding the movement of the platinum price over the next few years with a general expectation of an upward trend fuelled by a supply deficit from key producers such as Russia and South Africa.

If the price of platinum falls to a point where the perceived value is greater than white gold, then MetCon says there may be a jewellery manufacturing shift towards platinum-based alloyed products, particularly in the US market where white gold is more prevalent.

The growth potential of a thriving platinum jewellery industry in South Africa, is, however, constrained by the country's economic challenges where affordability of jewellery remains a crucial factor.

“We operate in a market dependent on the discretionary spending power of the general public,” the company says.

The exception lies in tourism markets, which present immediate opportunities for jewellery sales and should be “a key part of South African jewellers’ strategies”, MetCon concludes.