Anglo Roots for Fuel-Cell Platinum Demand in Electric CarsAndre Janse van Vuuren and Lutho Mtongana
Automakers must expand their offerings of fuel-cell vehicles or risk being pushed out of the burgeoning electric-car market, according to the world’s biggest producer of platinum, a component in the technology.
“This is an industry at an inflection point,” said Andrew Hinkly, head of marketing at Anglo American Platinum Ltd., or Amplats. “If fuel cells do not compete and take a sizable share of that electric-vehicle lineup, then clearly they’ll be replaced by batteries or smaller internal-combustion engines.”
The outcome of the automakers’ battle to win customers for their clean-air vehicles is crucial to the fortunes of platinum producers, which have seen prices for the metal slump almost 20 percent in a year. Wider use of fuel cells, which generate power by combining hydrogen and oxygen over a platinum catalyst, could help buoy sales at Amplats after earnings dropped 46 percent last year.
“It’s an industry that’s on the cusp of development,” Hinkly in an interview in Johannesburg, where Amplats is based. “We’re interested because it’s about the future of demand for platinum and that’s obviously of major significance to us.”
Hyundai Motor Co. and Toyota Motor Corp. introduced their first fuel-cell cars last year. They’re up against Tesla Motors Inc., Renault SA and Nissan Motor Co., which are backing batteries to make electric vehicles for the masses. The market may only accommodate one of the two technologies given the costs of building refueling and charging stations, according to Bloomberg Intelligence.
“It is very early to call a winner,” Gregory Elders, an analyst for Bloomberg Intelligence in London, said Thursday. While there’s capacity for both, “the question is if infrastructure really backs one type,” he said.
Hydrogen fueling stations are more expensive to build than charging stops. California, the world’s largest market for electric plug-in vehicles, could spend as much as $166 million to build 100 hydrogen stations, according to Elders. That’s enough to construct 2,750 electric fast-charging stations, he said.
On the flipside, fuel-cell cars have a range that’s longer than battery-powered models and similar to combustion-engine vehicles, according to Hinkly. “Consumer acceptance of a fuel-cell vehicle should be a lot more readily available than any other technology because it requires the least compromise,” he said.
Fuel cells could generate demand for as much as 400,000 extra ounces of platinum by 2025, according to Amplats. That’s double the potential new demand from other fuel-cell applications such as mobile-phone towers and forklift trucks, Hinkly said.
South Africa produces more than 70 percent of the global platinum supply. The metal is principally used in jewelry and in catalytic converters, where it triggers chemical reactions that break down carbon monoxide and other gases, reducing harmful tailpipe emissions.
Platinum for immediate delivery gained 0.5 percent to $1,165 an ounce at 1:25 p.m. in Johannesburg.
The makers of the combustion engines that use the catalytic converters represent about 40 percent of annual global platinum demand of 7.9 million ounces, according to the World Platinum Investment Council.