The world’s top platinum producer plans to set up a fuel cell component plant in a bid to increase the international demand for platinum.

This comes after large production and job cuts due to the year-on-year decrease in the price of platinum. Reuters has reported that almost two-thirds of the industry is making losses after the damaging five-month strike in 2014.

During the Investing in African Mining Indaba in Cape Town, chief executive of Isondo Precious Metals, Vinay Somera, said that the firm was preparing a feasibility study into assembling components for fuel cells using platinum. This study was made possible after the company secured a licence from the US-based Chemours Technology. The licensing agreement would allow Isondo to manufacture, market and sell fuel cell components internationally.

“We are looking to get manufacturing in the ground in the next one to two years,” Somera said at the Mining Indaba this week. Somera explained that the advantage to Isondo would be in lowering the cost of the technology by sourcing the metal locally. Reportedly the South African government has also promised tax incentives for manufacturing that takes place in special economic zones.

Reuters reports that trade and industry minister, Rob Davies, said at the conference his department was partially funding the feasibility study. “We want to establish this technology as something which builds into the platinum industry, supports and sustains an expansion and stabilisation of the platinum industry,” he said.

The current market for fuel cells is between 15 000 and 20 000 ounces of platinum per year, but Somera said the projected growth is 50 000 ounces and more in five years’ time.

The prospects for fuel cell demand include rural electrification across Africa, fuel cell stacks on gas pipelines in Nigeria, and possible adoption of fuel cell technology within the automotive industry. “The automotive sector is the holy grail,” Somera said.

Source: Fin24/Reuters