EDITOR: | October 13th, 2013 | 8 Comments

Critical Metals: Why you should add Platinum to your list (and make sure tin and tungsten are already there)

| October 13, 2013 | 8 Comments
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PlatinumPlatinum, indium, gallium, tin, tungsten — it is hard work keeping on top of developments in the critical metals field. It is hard work even concentrating on rare earths to remain across the main stories. The ground keeps changing beneath our feet.

Here are some of the items that have grabbed my attention in the past few days. This post was inspired by an announcement from Tasman Metals about their acquisition of six tungsten projects. Now, as many readers will know, tungsten has been a metal I have followed with interest. But Tasman’s CEO Mark Saxon sums it up succinctly: he says more than 80% of tungsten is sourced from Chinese mines and therefore this metal presents similar resource security challenges to those posed by rare earth elements. “Since 2008, Chinese domestic demand has exceeded its own supply, resulting in a near-doubling of price for tungsten concentrate over this period and a gradual increase in total traded volume. Tungsten demand growth has consistently outperformed GDP growth,” says Saxon.

The Japanese government, through its Japan Oil, Gas and Metals National Corp (JOGMEC), is backing the development of a tungsten mine in Queensland, Australia. The managing director of Vital Metals (ASX:VML) says he expects JOGMEC involvement to potentially pave the way for future investment in the Watershed mine by either Mitsubishi or Sumitomo. Tungsten will be needed by Japan for strengthening steel to be used in a range of products, including the new generation bullet trains which should start to roll out from 2025.

Perhaps, too, we should have been paying more attention to platinum. It was, after all, one of the Top 4 most critical metals listed on the British Geological Survey’s Risk List. And one of the few that made it on to that list not because China controlled the market. In this case, South Africa will dominates supply.

Now the well-known Canadian financier and mining investor Robert Friedland is talking about creating a “Platinum Valley” in South Africa’s Limpopo province. His argument is that the rise of mega-cities around the world will not only drive metal demand for construction but also those metals used in better air technology, particularly catalytic converters in automobile engines. It’s all about hydrogen fuel cell-powered cars: Friedland said he had it on good authority that Japan-based automaker Toyota will launch the world’s first commercially available hydrogen fuel cell-powered cars in November, which, according to him, would be a game changer for South Africa. The fuel cells needed for one car would contain about 30 grams of platinum, more than eight times the amount used in catalytic converters in conventional vehicles.

It is not all a bull market, though. Back in 2007 the New Scientist magazine predicted that, by 2012, the world would run out of indium. The metal had risen from $65/kg in 2002 to $1000/kg three years later. Indium is vital for television and computer screens but, as this is being written, the metal was fetching just over $500/kg.

Tin is one that recently I drew to your attention. The problem is that Indonesia’s new rules have strangled the market. The International Tin Research Institute (ITRI) reported from London on Friday that preliminary data shows tin exports in September had fallen by 92% compared to the same month last year. From 30 August all ingot exports have to be traded through a local exchange, which in practice means the Indonesia Commodity and Derivatives Exchange (ICDX). An application to establish a tin contract on the Jakarta Futures Exchange (JFE) was rejected by Indonesia’s market regulatory body on Monday. It’s all about Indonesia trying to force up the price of tin, and Reuters is now reporting that there are fears the world’s electronics industry may soon start to run short of tin solder.

The point is that two of the world’s electronics powerhouses, Japan and South Korea, depend almost entirely on Indonesia for their tin solder, the type now used to meet environmental standards in Europe and elsewhere (having replaced lead on those grounds). China is not so worried: it is the world’s largest producer and also importing tin from Myanmar (Burma) so its electronics industry won’t have the same headache as its Japanese or Korean competitors.

A tin consumer who buys from Indonesia and sells products to electronics companies said the firm was already looking for alternative sources of supply, though these appear limited, he was quoted as saying by Reuters. “We have a deadline — everything has to be decided by mid-November,” he added, referring to the latest point his company must secure its monthly supply deals for 2014 shipments.

And then there’s gallium, a metal recovered in the process of making alumina from bauxite. Gallium chemicals are used in light emitting diodes (LED), high frequency electronics and fast switching applications.

Canada-based 5N Plus Inc announced recently it will invest in a new gallium chemicals facility in South Korea to meet growing demand for gallium metal in LED manufacturing in Northeast Asia, it said. 5N Plus, listed on the Toronto Stock Exchange, focuses on germanium, high purity metals, semi-conductor substrates, recycling and solar applications.


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Comments

  • Veritas Bob

    At near-term prices for fuel-cell cars, I don’t think they’re going to take the world by storm very soon, and will amount to nothing more than a curiosity type thing relative to impact on platinum markets for quite some time.

    Per http://www.reuters.com/article/2013/10/10/us-toyota-fuelcell-idUSBRE99912520131010 , “Toyota engineer Hitoshi Nomasa said the company had cut its use of platinum, which sells on world markets around $1,380 an ounce (28 grams), from around 100 grams in the fuel cell of its current hydrogen-powered SUV model to around 30 grams.

    The figure would come down more with improvements in platinum coating technology, Nomasa told Reuters.”

    Per http://phys.org/news/2013-08-platinum-fuel-cells-economically-aerogel.html , “In a hydrogen fuel cell, hydrogen is converted into power and water through electrochemical reactions. A key step in these reactions is the reduction of oxygen at the cell’s positive electrode, where oxygen molecules fed into the cell are converted into water. As this reaction takes place very slowly under normal conditions, catalysts are needed to speed up the conversion process. In conventional cells, precious metals such as platinum fullfill this catalytic function. The thin nanoparticles used for this purpose are supported by a substrate typically made of high surface area carbon. However, the carbon substrate can easily become corroded during the common start/stop operation in city traffic or during idling; thereby compromising the function of the catalyst, which in turn shortens the service life of the entire fuel cell. Consequently, researchers have long been looking for catalysts for oxygen reduction that do not need a support and still display a high specific surface area with a large number of catalytic centres as well as good long-term stability.

    An international team of researchers involving the PSI has now made considerable progress in this direction. Using a three-dimensional aerogel made of a platinum palladium alloy, they were able to increase the catalytic activity for oxygen reduction at the positive electrode of a hydrogen fuel cell fivefold compared to normal catalysts made of platinum on carbon supports. This means that the same amount of oxygen can now be converted with only a fifth of the amount of precious metals. If this reduction of the necessary platinum load could be transferred onto an industrial scale, it would slash the production costs for these fuel cells. The aerogel, which is a kind of nanostructured foam, has also passed long-term tests in the lab, where the typical operating conditions in a vehicle were simulated.”

    Any idea how much platinum will be used per fuel-cell car by the time fuel-cell cars hit the big time in sales? If platinum use per car does not decrease significantly from current levels, perhaps fuel-cell cars never will hit the big time.

    October 13, 2013 - 12:39 PM

    • Robin Bromby

      If a guy (Friedland) sells a laterite nickel deposit for $4.3 billion then you listen to what he is telling you he knows about a market.

      October 13, 2013 - 3:43 PM

    • vacuum

      extremetech.com/extreme/133697-hype-kill-graphene-is-awesome-but-a-very-long-way-from-replacing-silicon

      the above article was written a year ago (c. August 6, 2012, ExtremeTech dotcom by Joel Hruska) intended as a hype kill of graphene. It points out that semiconductor application is distant because whatever is happening with graphene, the manufacturing apparatus does not yet exist.

      However, with a year in hindsight, we can appreciate the point of this article, and yet also realize that graphene has marched onward to many other wonders in the meanwhile.

      The point is that we should not make sugar mountain into a molehill.

      We could say of gold that nanotech sponge will reduce the mass demand for gold in technology. And yet that same sponge will generate new applications for gold hitherto unimaginable. Likewise, fuelcells were not a platinum demand factor until just recently. How many fuel cell machines are even in operation now? If mucho more come into operation, isn’t that better than just a few at a few universities even those were built with bricks of platinum?

      I.e., we sometimes need to think like Sam Walton in 1962.

      fwiw

      October 14, 2013 - 3:24 AM

  • vacuum

    excellent article; thank you!! for all your stellar contributions here.

    October 13, 2013 - 1:56 PM

  • Dr. Copper

    yes, and that is why all the iron ore projects in Australia and Brazil will find a
    furnace, even if Michael Slifirski says China’s current plans is not sustainable.

    I guess he is too busy melting something else.

    October 13, 2013 - 5:43 PM

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