Earlier this week, Anglo American announced plans to separate from its platinum business, Anglo American Platinum (Amplats), as well as from its De Beers diamond business and coal projects. This move aims to refocus the company on copper, iron ore, and crop nutrients. While the divestment from diamonds and coal aligns with environmental trends and the global energy transition, the decision to exit the platinum sector raises several questions.
Lab-grown diamonds are becoming more popular among environmentally conscious consumers, and the global shift away from coal is well-documented. However, the platinum market presents a different scenario. Despite current challenges, the fundamentals of the platinum group metal (PGM) market remain strong, as evidenced by the sector’s recent performance.
Platinum has seen increased demand due to its vital role in electric vehicles and hydrogen fuel cell technology. In 2023, the market experienced a deficit of 850,000 ounces, with a forecasted deficit of 476,000 ounces in 2024. This growing demand, combined with supply constraints, highlights platinum’s importance in the global energy transition.
The U.S. has designated platinum as a critical mineral, reflecting its strategic importance. The concept of “critical minerals” involves both future demand and the likelihood of supply disruptions. Platinum, once not seen as critical, now holds a significant position due to its applications in clean energy technologies.
Production challenges are evident, particularly in South Africa and Russia. South Africa, a major producer, faces declining output due to operational issues, while Russia’s production is impacted by geopolitical factors and sanctions. These challenges contribute to the projected supply shortfall.
Anglo American’s decision to exit the platinum business comes at a time when the sector’s long-term potential appears robust. Other companies may acquire these assets, but Amplats has been a stable and integral part of global platinum mining. Anglo American’s strategic shift is significant, given the company’s long-standing presence in the industry.
Mining is a long-term industry, and strategic planning is essential. Despite current low commodity prices and operational difficulties, the outlook for platinum remains positive. The U.S. has limited domestic platinum production, underscoring the importance of South African output in meeting global demand.
The future of the platinum sector will depend on how it navigates current challenges and capitalizes on emerging opportunities in the clean energy transition. Anglo American’s restructuring reflects broader trends in the mining industry, but the impact on the platinum market will be closely watched. 
