The global platinum mining industry, particularly in South Africa, the largest producer, is grappling with significant challenges as weak demand has led to revenue losses and job cuts. This downturn threatens the viability of the sector, which is critical to the global energy transition due to platinum’s essential role in making electrolysers and fuel cells cost-competitive.
According to the World Platinum Investment Council, platinum demand surged by 25% year-on-year to 8.009 million ounces (moz) in 2023, while supply dropped to 7.131moz, marking the second-lowest figure since 2013. This resulted in a deficit of 878,000 ounces, with shortages observed every quarter, including a shortfall of 74,000 ounces in Q4 2023.
Despite the supply-demand imbalance, global platinum prices remained relatively stable in 2023, averaging $1,060.2 per ounce, a slight 0.5% increase from the previous year. However, prices fell to an average of $1,015.8 per ounce in January 2024, a 6.9% decrease compared to the same period in 2023. GlobalData forecasts further declines, with prices expected to average $940 per ounce in 2024.
GlobalData mining analyst Vinneth Bajaj attributes the price slump to a slowdown in the automotive industry, where sluggish car sales have reduced the demand for platinum used in catalytic converters. However, production cuts in 2024 could shift the supply-demand balance, potentially stabilizing or increasing prices if car sales rebound.
South Africa, Russia, Zimbabwe, Canada, and the US collectively produced 96% (5.9moz) of the global platinum output in 2023. In South Africa, production is expected to decline by 0.6% to 4.3moz in 2024 due to operational challenges, including limited electricity availability, oil constraints, and falling prices. The reopening of the Bokoni project and the launch of the Platreef project may offset some of these declines.
Russia’s platinum production is projected to decrease by 10.7% to 660,600 ounces in 2024 due to operational disruptions at Norilsk Nickel’s Nadezhda plant. Conversely, production increases in the US, Zimbabwe, and Canada are expected to partially compensate for the declines in South Africa and Russia. The US, for instance, is projected to boost output by 10%, driven by increased production at Sibanye Stillwater’s East Boulder and Stillwater mines.
South Africa’s platinum sector is facing severe economic and social impacts. Production dropped by 32% in the first quarter of 2024, with major mines like Impala, Marikana, and Mogalakwena struggling to maintain output. The industry has seen job cuts and postponed investments due to a sudden change in market outlook following a rapid drop in metal prices. For instance, Impala Platinum (Implats) announced plans to restructure its operations, potentially resulting in 3,900 job losses, following a significant safety incident that caused 11 deaths and 75 injuries.
Anglo American Platinum (Amplats) also plans to cut thousands of jobs after a 71% drop in profits last year. The company’s restructuring plan could affect around 3,700 jobs, or 17% of its workforce. In 2023, Amplats’ profits fell 73% to R13bn ($688m) from R49.2bn in 2022, leading to an 81% reduction in dividends.
Despite these challenges, the global platinum market is expected to grow at a compound annual rate of 1.3% to 6.6moz by 2030. South Africa will continue to be the largest supplier, with production projected to reach 4.5moz by 2030, according to GlobalData. 
