In a windfall for the South African mining sector, the demand for the country’s vast platinum reserves will rise sharply as China ramps up its production of fuel cell energy vehicles (FCEVs).
The precious metal is vital to the manufacturing process of zero-emission hydrogen fuel cells.
Platinum is a dense, unreactive, precious metal found in the Earth’s crust. Its properties make it an ideal candidate for a plethora of industrial uses, including the electrolysers used in the production of green hydrogen, a clean energy source.
The Chinese automotive industry hosts an abundance of young new energy vehicle (NEV) startups, as well as established players, like BYD Geely, that have developed NEVs, including fully electric (EV) and FCEVs.
China dominates the FCEV industry, particularly with regard to buses, where its fleet of 5 290 units accounts for 94% of the market share, according to data shared by the International Energy Agency Advanced Fuel Cells Technology Programme.
The automotive industry is pivoting, at varying degrees of speed, towards phasing out internal combustion engines (ICE), in favour of greener alternatives in accordance with Paris Climate Accords.
Signed in 2015 by 194 nations, the Paris Agreement’s fundamental objective is to cut emissions by 50% by 2030 and reach net zero by the middle of the century.
Chinese heavy industries and construction companies have already begun deploying FCEVs rapidly. According to Mining Weekly, the country has an estimated seven million heavy-duty trucks – roughly one-third of the global tally of 20 million.
Those vehicles will need replacing and that process will be rapid. A Bloomberg New Energy Finance report predicts that about half the world’s large trucks will be powered by new energy power come 2040.
China is relentlessly rolling out the infrastructure necessary to support the rapid transition from an ICE-powered motor industry to a significantly greener alternative.
The Asian giant was targeting 1 000 hydrogen refill stations nationwide by the decade’s conclusion, according to Mining Weekly.
According to data published by the Canadian government, South Africa accounts for an impressive 94% of the world’s total platinum reserves, leaving it uniquely positioned to benefit from the surge in demand.
Recent research conducted by the World Platinum Investment Council (WPIC) predicts platinum demand for FCEVs could reach 3 000 000 ounces (85 000 tons) by 2033 in a “commercially enhanced” scenario.