Platinum well positioned in hydrogen economy’s sweet spotsThe upcoming platinum demand of Hyundai alone could come close to taking up the total annual production of one of South Africa’s biggest platinum mines.
Hyundai has stated categorically, in a double-page advertisement in The Economist of London, that it will be making 700 000 fuel cell stacks a year by 2030. (Also watch attached Creamer Media video.)
While Hyundai has not given exact platinum loadings for the fuel cell stacks, it is estimated that each fuel cell stack will require about 1 oz of platinum, which would total 700 000 oz of platinum per year, just for Hyundai alone.
“That’s almost equivalent to what Rustenburg produces annually, so it’s a significant amount of demand,” World Platinum Investment Council director of research Trevor Raymond commented to Mining Weekly in a Zoom.
“If you talk 2030, there’s a debate on whether you’ll have either one-million or five-million fuel cell passenger vehicles on the road, and that’s ten years out. What Hyundai is saying is 700 000 stacks of which a third will go to trucks and they will have two stacks per truck, or about 2 oz per truck, that still leaves 500 000 oz going into cars.
At the moment Toyota’s Mirai and Hyundai’s Nexo also use about an ounce, which should come down with mass production over time.
“So, what Hyundai is saying is that they probably believe that they’ll be somewhere between 300 000 or 500 000 vehicles that will be fuel cell Hyundais as part of a larger global fleet, and that fleet is growing quite aggressively in China,” said Raymond.
The likely demand for platinum in the short term comes from heavy duty trucks. Hyundai Xcient fuel cell trucks are being rolled out in Europe.
Toyota has put the Mirai content into Class 8 fuel cell trucks and these are being trialled at the Port of Los Angeles, in the US. There are many bus fleets around the world, particularly in Shanghai and Beijing and in the north of China, that are converting to fuel cell.
“That demand is quite good but from heavy duty trucks, you’re probably looking at 100 000 oz to 300 000 oz of platinum demand in the next three years, so that suddenly becomes material to short-term interest,” he added.
HYDROGEN PRODUCTION IS SECOND BIG CHANGE
Most hydrogen has been produced by stripping the hydrogen from fossil fuels in a process called steam reforming, which is not decarbonising.
To make green hydrogen, electrolysis can be used. If that electrolysis is powered by a coal-fired power station, it is also not decarbonising.
But when solar power, wind energy and renewables are used to generate hydrogen through electrolysis, green hydrogen is produced.
“If we can sustainably use wind and solar to generate hydrogen from water, that’s really the sustainable route into the future, and that’s really the game-changer,” said Raymond.
One route uses the fuel cell for the electrolysis, with platinum and iridium cathodes, with iridium also a platinum group metal (PGM).
Until recently, the amount of iridium required was far more than yearly iridium but a new iridium catalyst made by German company Heraeus contains 50% to 90% less iridium than conventional products – plus up to three times higher catalyst performance, Heraeus said. The lower precious metal content of the Heraeus product reduces costs by up to 43%, rendering green hydrogen affordable.
“What we do see in the generation of this green hydrogen is maybe another 100 000 oz to 200 000 oz in the next few years, certainly in the order of 500 000 oz by 2030, of platinum used to generate the electrolysis.
“The Heraeus announcement was really a breakthrough because it means you can generate green hydrogen quite effectively. So, certainly short-term platinum demand from trucks and electrolysis and longer-term demand from passenger fuel cell vehicles,” said Raymond.
STILL NOT REFLECTED IN THE PLATINUM PRICE
Despite the few hundred thousand ounces of platinum demand in the short term and close to a million ounces in the slightly longer term, there still is not any investment of significance yet by investors wanting to take a view on the hydrogen economy.
With Covid-19, there has been a rush into precious metals, and even copper, but platinum is still lagging behind. This is probably for two reasons, the first being that the link between the hydrogen economy and platinum has not been made by many investors, despite platinum being a way to invest in the hydrogen economy.
The platinum prices is still not reflecting the three main changes, one being the hydrogen economy and that demand, the second being substitution of platinum into gasoline catalysis to replace high-cost palladium and the third recognition of the mild hybrid diesel being a very low carbon dioxide- (CO2-) emitting vehicle should the transition from the internal combustion engine to the battery electric vehicles be slower because of the cost of Covid-19.
“We think that more diesel vehicles on the road will be part of the solution to get us through Covid and be most cost-effective while embracing this hydrogen economy,” said Raymond.
PGMS STILL SCRATCHING SURFACE
Scientists are continually learning that PGMs can improve efficiencies. They change a small ratio between platinum and another metal and they get significant performance improvement.
“I think we’re still scratching the surface of just how wonderful these platinum group metals are in isolation and together. The other interesting thing is that there’s still this belief that a battery electric vehicle is zero emission and there’s not too much focus on the CO2 emission to produce that battery and certainly, at the end of life, to get rid of that battery.
“The battery vehicle does remove emissions from the city centre but it takes that CO2 and moves it to the power station and if you are using coal-fired power stations to charge your battery vehicle, you certainly aren’t helping the environment, whereas green hydrogen is a sustainable fuel source.
“So, I think the battery electric vehicle will have its place, but it’s not sustainable unless it makes use of renewable power and the other benefit of green hydrogen that if you want to increase the use of renewables, you do have to store electricity and that’s kind of hard to do.
“The UK still switches off peak Scottish wind because people can’t use it but if you can store that as hydrogen, suddenly you make that hydrogen available for trucks and then ultimately for cars.
“So, I think the hydrogen economy talks to power generations and the large users of electricity and fossil fuels. Certainly, there is a lot of heavy industry that uses fossil fuels that can switch to hydrogen. So, it’s got so many benefits and it’s a long-term game-changer and platinum sits right in that sweet spot. It’s part of generating, it’s part of using and certainly an easy way to get exposure to an investment in the growth of this hydrogen economy,” said Raymond.
FAST-TRACKING OF HYDROGEN
The fast-tracking of the hydrogen economy will be much quicker than most people have imagined, Sibanye-Stillwater CEO Neal Froneman told the Financial Times (FT) Commodities Mining Summit, where he was part of a panel that included Anglo American Platinum CEO Natasha Viljoen.
Froneman was speaking after others had outlined the amazingly broad potential applications of PGM-catalysed hydrogen fuel cells and electrolysers across not only transport, which gains most of the headlines, but also in hydrogen generation itself, energy storage, heating, cooling, clean steelmaking and a host of other industrial, mining, commercial and residential applications, at a time when cost-lowering within the hydrogen economy is gaining impressive momentum and plans are being devised to showcase hydrogen’s prowess at iconic global events, including next year’s Olympic Games in Japan.
“We intend to hold a conference in Tokyo at the Olympics next year to demonstrate that the hydrogen economy is happening. We actually see the future for platinum in a very robust light based on the transition to a hydrogen economy,” Froneman said.
Viljoen drew attention to a technology being developed that would use PGMs in that battery technology.
“It’s really enhancing the life and size of the battery and that ultimately is required,” said Viljoen, who added that PGMs would be playing a big role in improving the range of distance that battery electric vehicles could travel and lower recharge time.
“With that market development that we’re doing through our AP Ventures, it creates an opportunity for PGMs to play a role independent of what the drive train preference will be going forward,” said Viljoen. AP Ventures LLP is an independent venture capital firm incorporated in the UK and supported by Anglo American Platinum, the South African Public Investment Corporation, Mitsubishi Corporation, the Toyota-linked Mirai Creation Fund and Plastic Omnium. AP Ventures’ global mandate is to invest in pioneering new technologies across the areas of sustainable energy and resource scarcity, that use or enable the use of PGMs.
North America-listed PGMs company Platinum Group Metals (PTM), headed by CEO Michael Jones, believes PGMs will start to play a greater role in the development of more efficient lithium-ion batteries on the basis of lithium oxygen and lithium sulphur batteries performing better with the addition of PGMs to increase the energy density of batteries.
Anglo American Platinum is partnering PTM in Lion Battery Technologies, with the venture 52% PTM-owned and 48% Anglo American Platinum-owned.
As Mining Weekly reported recently, the first batteries of this kind are likely to go to China, which has already made significant advances in the deployment of platinum-catalysed fuel cell trucks.
DEMAND FROM REGULATION
British information provider IHS Markit projects that electric vehicles (including battery, plug-in hybrid and fuel cell electric) will comprise 60% to 80% of all new car sales in 2050. That increased market share (from 2.2% of new car sales in 2020, according to IHS Markit data) will be driven by greater scale in manufacturing, as well as the continued improvement of batteries. IHS Markit now projects that the average lithium-ion cell cost will fall below $100/kWh by 2023.
Gasoline-powered vehicles will still comprise two thirds of the 1.9-billion cars on the road in 2050 owing to the time it takes for the fleet to turn over, IHS Markit vice chairperson Daniel Yergin writes in his new book, The New Map: Energy, Climate and the Clash of Nations.
The average age of vehicles on the road in the US is nearly 12 years, Yergin observes in The New Map.
“At least for now, the demand for electric vehicles is largely coming not from consumers, but from governments whose evolving policies are shaped by climate concerns as well as by urban pollution and congestion,” he writes.
Failure to meet new government targets for lowering emissions could cost European automakers as much as $40-billion in fines over the next five years, he adds.
Electric vehicles also bring their own set of challenges, particularly in the supply chain of some battery materials, Yergin observes. Electric vehicle demand for lithium could rise 1 800% by 2030 and would represent about 85% of total world demand. Demand for cobalt, another essential element in batteries, could rise 1 400%. More than 50% of global cobalt supply comes from the Democratic Republic of the Congo.