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Electric buses expected to spur platinum demand – Implats

Impala Platinum (Implats) group executive marketing Paul Finney

Impala Platinum (Implats) group executive marketing Paul Finney

Photo by Duane Daws

19th September 2017

By: Martin Creamer

Creamer Media Editor

     

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JOHANNESBURG (miningweekly.com) – Electric buses powered by platinum-catalysed fuel cells are attracting the attention of South Africans, who will visit Germany next month to update themselves on passenger carriers that emit zero pollution into the atmosphere.

“There’s a lot of interest in fuel cell buses simply because the refuelling points can be centralised at a depot, and we’ve got a visit lined up to Germany to look at fuel cell buses and trains in October,” Impala Platinum (Implats) group executive marketing Paul Finney told Mining Weekly Online during a media roundtable.

In February, South African fuel cell protagonists and government officials met their German counterparts in South Africa to discuss a pilot project involving the introduction of hydrogen fuel cell buses in cities in South Africa.

Germany, which has already rolled out some such buses in Berlin, Stuttgart and Hamburg, earlier this year shared its experiences with a range of interested South Africans from municipal officials and the platinum executives to universities and Hydrogen South Africa.

Now, representatives of many of South Africa’s metros, including Tshwane, Johannesburg, Ekurhuleni and Nelson Mandela Bay, along with officials from the Passenger Rail Agency of South Africa, will be visiting Germany to see first-hand what is being achieved with fuel cell powered passenger transport.

Anglo American Platinum (Amplats) has reported that China is targeting one-million fuel cell electric vehicle sales by 2030, the equivalent of 300 000 oz of platinum demand, with orders for 18 000 fuel cell buses and light delivery vehicles placed in the first five months of this year.

Fuel cells convert hydrogen into electricity through a chemical reaction that relies on platinum’s catalytic role.

Plans are at an advanced stage for the development of a Gauteng Industrial Development Zone (GIDZ) as a base for local fuel cell development.

“We’re at the point now where the GIDZ have done a feasibility study, both technical and commercial. We’re willing to donate 16 ha of land and have also put in quite a bit of money over the last couple of years to develop the site.

"Fuel cells are something that are quite futuristic. They’re not mainstream so we have to sensitise government departments and local authorities as to what a hydrogen economy can look like,” Finney outlined at the media roundtable.

To that end, Implats has developed fuel cell applications, including a fuel cell driven forklift, and identified an original equipment manufacturer for the development of fuel cell driven load haul dumpers (LHDs) and underground equipment. An estimated 8 000 oz of platinum will be required for every 1 000 fuel cell LHDs.

“We’re looking at piloting something there and creating critical mass for a local manufacturing facility,” Finney told Mining Weekly Online.

Implats, which is South Africa’s second-largest platinum mining company, is pursuing both short-term market stimulation and longer term new applications.

It is in partnership with particularly Far Eastern companies to discover new applications for various platinum-group metals (PGMs), as part of a multi-faceted strategy.

The company is working on gaining Critical Infrastructure Programme (CIP) approval from the Department of Trade and Industry (DTI) to generate 8 MW of off-grid electricity from a platinum-catalysed fuel cell system at the Impala Refinery in Springs, which will make use of natural gas from Sasol’s grid.

“We’re still struggling with the DTI on the go-ahead for the 8 MW Doosan plant in terms of the CIP approval,” Finney said, adding that the company would be engaging with the department's director general (DG).

“We’re at the stage where we have to sit down with the DG now, engage and make sure the DTI understands what the rationale is to get that 8 MW fuel cell started and running. We seem to be missing each other somewhere on the rationale for that fuel cell. It’s not there as back-up emergency power. It’s there as a principal proving test piece so that we can demonstrate and showcase its robustness and reliability,” he added.

The application is already with the DTI to get the donated ground and area promulgated as a Special Economic Zone (SEZ).

The Doosan system involved requires a minimum of 2.5 kg of platinum per 400 kW system, which equates to about 160 000 oz of new platinum demand for every 1 000 MW of fuel cell power capacity created.

“We’re the second largest platinum producer and we take our responsibility as a leader in the industry very seriously. We are very supportive of promoting demand stimulus,” Implats CEO Nico Muller told the journalists present.

Much is also being done to boost short-term demand for platinum, where jewellery plays a major role.

Over and above Implats’ standard $13-million contribution to Platinum Guild International, the organisation that has been promoting platinum jewellery for the last 45 years, it contributed an additional $1-million in the last 12 months to specifically support the marketing of Chinese bridal jewellery, and this is already bearing fruit.

Of all the platinum demand levers, platinum in jewellery is the one that can be activated the quickest and the most directly, which is important in light of the need of the struggling platinum industry to continue to create demand for platinum, so that upward pressure is applied on the currently low metal prices being received by PGI's funders – Amplats, Implats, Lonmin, Northam, Sibanye-Stillwater and Royal Bafokeng Platinum.

“The Chinese market has huge potential, but it also needs huge work to access that,” said Finney.

Speaking to Mining Weekly Online while in South Africa from Hong Kong, PGI CEO Huw Daniel outlined how additional marketing of jewellery could create demand for another 3.5-million ounces of platinum.

In India, demand growth of 25% to 30% a year is coming off a relatively low base of 200 000 oz a year, with 500 000 oz a year in sight by 2020.

“We’re in about 900 jewellery stores in India at the moment. The potential there is at least 2 000 to 3 000 more stores,” Daniel told Mining Weekly Online.

Finney outlined that the new way the PGI operates is in partnership with manufacturers and retailers. When a co-programme is stimulated in China through a Chinese retail partner, a nigh 50:50 financial contribution is becoming the norm.

In a similar vein, the six South African platinum-mining companies sponsor the World Platinum Investment Council (WPIC), which is developing similar self-generative models to encourage investment.

The WPIC was behind the decision of the Royal Mint, in the UK, to launch its first-ever platinum bullion products, which has rekindled hopes that the South African Mint will wipe the dust off plans for a platinum Mandela coin and mimic some of South Africa’s gold success with the 50-year-old Krugerrand coin.

In South Africa, Implats has been beavering away on the technical front to assist the South African Mint to produce platinum coins.

“We got the mint as far as producing a coin last year. Unfortunately, it was a proof coin, it was the platinum Krugerrand. We sold about 2 000 of those and we’re still pursuing the production locally of a bullion coin.

“If you look at coin sales last year, which totalled 113 000 oz of platinum, the Eagle was reminted by the US in January of this year and in three days they sold 20 000 coins. So, there’s clearly pent up demand and we continue to engage with the South African Mint in the production of coins,” said Finney.

Several mining companies are considering how fuel cells can be used within their own operations. From a pure zero-emission perspective, it makes sense to use fuel cell equipment underground, but a prototype that works is needed first before that can actually happen.

Many believe that South Africa should be supporting and promoting its own fuel cell applications and own technologies to create demand for platinum.

An SEZ where fuel cell manufacture can take place could lead to the commercialisation of items like fuel cell forklifts and buses.

When it comes to fuel cells generating clean electricity, the combination of heat-and-power applications makes economic sense.

Doosan Fuel Cell America, which envisages laying on an eventual 20 MW-plus of fuel-cell power at the Implats refinery, is also involved with the building a 30.8 MW fuel-cell power plant for Korea’s largest power utility.

To date, Doosan Fuel Cell America has deployed more than 110 MW of fuel cells around the world.

Doosan Fuel Cell American VP business development Eric Strayer, who spoke during a fuel-cell panel discussion at the Council for Scientific and Industrial Research (CSIR) conference centre earlier this year, reported that the Korean government was among a growing number of world governments that classify fuel-cell energy as renewable energy.

Korea Hydro and Nuclear Power Company, which provides 40% of Korea’s electricity, is building the fuel cell plant to meet its renewables goals.

Strayer noted that the renewables classification for fuel cells stemmed from their lower carbon footprint.

Land required for a 400 kW fuel cell is tiny compared with land required to do the same in wind and miniscule compared with solar.

In the 1960s, United Technologies Corporation of the US developed fuel cells for the Apollo space mission and since then, fuel cells have been supplied into every manned space mission.

Since Doosan’s acquisition of United Technologies' fuel cell business in 2014, it has been intensely focused on expanding markets in the 460 kW fuel cell range, which is ideal for the powering of buildings.

The heat-integrated fuel-cell plan has been found to be competitive with the Eskom megaflex tariff over the 20-year over-the-fence power purchasing agreement that the company has clinched.

Meanwhile, fuel cell electric vehicle sales are expected to grow by more than 200% this year, with Japan targeting 200 000 fuel cell electric vehicles on its roads in 2025 and 800 000 in 2030.

Amplats executive head of marketing Andrew Hinkly said in response to Mining Weekly Online at the company’s presentation of financial results in July that two-thirds of Amplats’ market development investment is directed towards growing demand for platinum jewellery and platinum investment, with most of that in jewellery.

Half of the expenditure on developing the platinum jewellery market is directed at China and the balance is predominantly directed towards India, where substantial success has been achieved.

In addition, Amplats invests in research and development (R&D) with universities in South Africa, the US and Europe.

The company has a number of demonstration projects that are intended to take the R&D investment to the next stage of commercialisation.

Within Amplats is a venture capital fund, in which $35-million has been invested in the last four years in eight companies that are in the early stages of the commercialisation of different technologies that use platinum-group metals (PGMs) or enable the use of PGMs.

These investments are in fuel cell companies, micro gas-to-liquids companies, hydrogen transportation and companies that support future PGM demand.

Amplats also spends time and effort lobbying principally the US and China on the hydrogen economy, which has led to the establishment of the hydrogen council, together with Toyota and Air Liquide and a number of other companies, including Anglo American, for a sector that is poised to be a significant driver of future PGM demand.

Edited by Creamer Media Reporter

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