Why Australia is about to go platinum Peter KerResources reporterNov 12, 2021
The last time platinum was fashionable in the Australian mining sector, Dr Steve Barnes was working as an exploration geologist on a target near the West Australian hamlet of Yarawindah Brook.It was the late 1980s, unleaded fuel was starting to become common at Australian petrol stations, and platinum’s ability to strip toxins out of vehicle exhausts fitted neatly with the zeitgeist of the time.Western Australia’s Avon Valley is the scene of a new rush to find platinum group elements. Department of Parks and Wildlife“There was quite a bandwagon, everybody was jumping around looking at platinum group element prospects,” he said.Barnes was reminded of those heady days this week, when the first quantification of a PGE target found by Chalice Mining just 40 kilometres down the road from Yarawindah Brook was described as one of the best ever seen.“We looked at it [Yarawindah Brook] and walked away. It was possibly one of the worst decisions I made in my brief career as an exploration geologist,” recalled Barnes, after watching this week’s extraordinary market reaction to Chalice’s discovery.Yarawindah Brook is once again being probed for its PGE prospectivity, this time by micro-cap explorer Caspin Resources.Caspin had just $13 million of cash in the bank at September 30, but Yarawindah Brook’s proximity to Chalice’s Gonneville discovery sparked a 34 per cent rise in Caspin shares over the week as investors bet that Chalice had found just the tip of what could be a proverbial iceberg in the picturesque Avon Valley region.Dr Barnes is an expert in magmatic geology with a particular focus on platinum group elements, and he reckons Chalice’s Gonneville deposit would be Australia’s first predominantly PGE mine if developed.Anti-pollution roleWhile the six metals that make up the platinum group – ruthenium, rhodium, palladium, osmium, iridium and platinum – have been extracted from Australian soil before, they have typically been byproducts dug up by miners focused on the nickel and copper often found with PGEs.Gonneville would reverse that dynamic, with its substantial nickel, copper and cobalt reserves being bonus byproducts for a business whose backbone would be the platinum group.In an era when electric vehicles are proffered as the future demand driver for many metals, the narrative around PGEs is more nuanced.Platinum, palladium and rhodium play a crucial catalyst role in the converters that turn toxic substances in the exhaust of vehicles into less toxic substances; the prime example being platinum’s role in oxidising carbon monoxide into less toxic carbon dioxide.In that sense, PGE demand has benefited from the world’s desire to reduce pollution from the transport sector.“Auto-catalyst demand will benefit from tightening emissions legislation on heavy-duty trucks in China, and rising use of platinum in gasoline catalysts,” said British chemicals company Johnson Matthey in a recent note on PGEs.Johnson Matthey reported in May that auto-catalysts were responsible for between 31 per cent and 33 per cent of global platinum demand in 2020 and 2019.Auto-catalysts represented closer to 85 per cent of palladium demand and 90 per cent of rhodium demand according to Johnson Matthey’s numbers.Auto-catalysts represented closer to 85 per cent of palladium demand and 90 per cent of rhodium demand according to Johnson Matthey’s numbers. But if the push to reduce pollution from the transport sector is taken to its logical extent and petrol-powered cars disappear from the world’s roads entirely, a big source of demand for PGEs would disappear too. International Precious Metals Institute chairman Bodo Albrecht was reported by Reuters in 2017 as being sceptical that an alternative source of PGE demand could be found to replace auto-catalysts. Hydrogen production But PGEs’ catalytic properties are not limited to petrol and diesel cars; they are used in a wide array of industrial processes including glassmaking and jewellery. Hydrogen is shaping as a “future facing” opportunity for PGEs, particularly through proton exchange membrane (PEM) electrolysis, which is the process that Fortescue plans to use to split water into hydrogen and oxygen. Two of the lesser-known PGEs, iridium and ruthenium, are the best anode catalysts within PEM electrolysis, while platinum is the best cathode catalyst The lesser-known PGEs are traded in particularly small and illiquid markets, meaning prices can be extraordinarily volatile when supply disruptions hit, as they did at Anglo American’s South African mines in March and April. That disruption drove iridium and rhodium prices to a record high, while palladium has been close to record prices and ruthenium prices traded at a 13-year high. By discovering a big new source of PGEs in a stable jurisdiction that the US considers to be among its closest allies, Chalice has played the “critical minerals” card to perfection. ”PGEs are indispensable to many industrial applications but are mined in only a few places. The availability and accessibility of PGEs could be disrupted by economic, environmental, political, and social events. The United States’ net import reliance as a percentage of apparent consumption is about 90 percent,” said the USGS and the US Department of the Interior in a 2017 paper on PGEs.But if the push to reduce pollution from the transport sector is taken to its logical extent and petrol-powered cars disappear from the world’s roads entirely, a big source of demand for PGEs would disappear too.International Precious Metals Institute chairman Bodo Albrecht was reported by Reuters in 2017 as being sceptical that an alternative source of PGE demand could be found to replace auto-catalysts.Hydrogen productionBut PGEs’ catalytic properties are not limited to petrol and diesel cars; they are used in a wide array of industrial processes including glassmaking and jewellery.Hydrogen is shaping as a “future facing” opportunity for PGEs, particularly through proton exchange membrane (PEM) electrolysis, which is the process that Fortescue plans to use to split water into hydrogen and oxygen.Two of the lesser-known PGEs, iridium and ruthenium, are the best anode catalysts within PEM electrolysis, while platinum is the best cathode catalystThe lesser-known PGEs are traded in particularly small and illiquid markets, meaning prices can be extraordinarily volatile when supply disruptions hit, as they did at Anglo American’s South African mines in March and April.That disruption drove iridium and rhodium prices to a record high, while palladium has been close to record prices and ruthenium prices traded at a 13-year high.By discovering a big new source of PGEs in a stable jurisdiction that the US considers to be among its closest allies, Chalice has played the “critical minerals” card to perfection.”PGEs are indispensable to many industrial applications but are mined in only a few places. The availability and accessibility of PGEs could be disrupted by economic, environmental, political, and social events. The United States’ net import reliance as a percentage of apparent consumption is about 90 percent,” said the USGS and the US Department of the Interior in a 2017 paper on PGEs.
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