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VW debacle unlikely to hit platinum hard – Sibanye

Justin Froneman

Justin Froneman

Photo by Duane Daws

7th October 2015

By: Martin Creamer

Creamer Media Editor

  

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JOHANNESBURG (miningweekly.com) – Precious metals mining company Sibanye, which is bulking up on platinum, does not expect a consumer backlash against diesel vehicles, which are major platinum users.

JSE- and NYSE-listed Sibanye, which is taking steps to acquire Rustenburg Platinum from Anglo American Platinum as well as the entire issued share capital of Aquarius Platinum, in fact sees the possibility of lower platinum prices potentially triggering a swing back to platinum for gasoline autocatalysis, which is currently largely the preserve of palladium.

In the view of Sibanye Platinum CFO Justin Froneman, the key issue to unpack is whether or not the VW emissions scandal will result in a consumer backlash.

“You are seeing some numbers coming through that support a consumer backlash but we don’t think it has long legs,” Froneman told Creamer Media’s Mining Weekly Online during question time at the analyst and media conference Sibanye called on Tuesday to announce its planned acquisition of the Sydney-, London- and Johannesburg-listed Aquarius Platinum.

Froneman’s rationale is that the VW debacle looks like probably being a US issue only and one centring on nitrogen oxide (NOx) rather than on carbon dioxide (CO2), caused by VW skimping on the trapping of NOx, a leading cause of smog and acid rain, which can be captured by a catalytic converter, as has been standard equipment on most gasoline cars for decades.

But it is a different story for cars that run on diesel, because the same emission controls are not nearly as effective on a diesel car, International Council on Clean Transportation senior fellow John German is quoted as saying.

The solutions for diesel are much more expensive and difficult to do, which is why NOx in diesel is a particular focus.

The International Council on Clean Transportation, which discovered the problem with VW and Audi exhaust systems and which alerted authorities at the US Environmental Protection Agency and the California Air Resources Board, notes that it is in Europe that diesel vehicles are very popular and where they account for nearly half of cars on the road.

But in the US, gasoline is cheap and the taxes on diesel fuel high, which has made diesel cars much less popular in the US, even though they get better mileage.

There are fewer than 500 000 of the affected VW and Audi diesel cars on US roads, out of more than 11-million worldwide, which the German newspaper Frankfurter Allgemeine Zeitung reports will begin being recalled in January and fixed by the end of 2016.

As high fuel prices and taxes make diesel a less expensive option in Europe, it will probably continue to drive demand for platinum there.

In fact Froneman notes that some automotive companies have actually come out “fairly substantially and quite strongly” on diesel being an “absolute necessity” for them to meet their CO2 requirements by 2020.

On the efficiency of platinum versus palladium in autocatalysis, platinum is also known to be a far more effective catalyst and at a certain pricing point – and it remains to be seen where that point is – the potential exists for even gasoline autocatalytic converter manufacturers to begin reverting back to platinum.

“We’re staying close to this and I suppose it does open up the avenues towards things like fuel cells and the like, but I don’t want to get thrown out for mentioning that just yet,” Froneman commented in response to Mining Weekly Online’s question.

But on the eve of the October 8 National Hydrogen Day abroad, many websites are currently far more vocal on the efficacy of zero-emission fuel cell electric vehicles (FCEVs).

Mining Weekly Online can itself also add that former Sasol CEO Peter Cox used to tell us that Sasol’s coal-based vehicle fuel is suitable for fuel cell vehicles that have onboard gas reformers; if that fact is taken to heart in South Africa, it could have the double benefit of boosting both locally produced coal-based transport fuels while at the same time increasing domestic demand for platinum, with each FCEV requiring close to 14 g of platinum per vehicle.

DriveClean reports that most vehicle manufacturers have placed FCEVs with customers and that many will introduce FCEVs commercially in the 2016 to 2017 timeframe. This US-based organisation names Ford, General Motors, Honda, Hyundai, Mercedes-Benz, Nissan and Toyota as being involved in the development and commercialisation of FCEVs.

At filling stations in the US, UK and Japan, compressed hydrogen is fed into a vehicle’s fuel cell stack, which produces electricity to power the vehicle.

“A fuel cell can be used in combination with an electric motor to drive a vehicle quietly, powerfully and cleanly,” DriveClean adds.

Each fuel cell has an anode, a cathode and a proton exchange membrane sandwiched in-between.

Hydrogen from a tank onboard the vehicle enters into the anode side of the fuel cell and oxygen, pulled from the air, enters the cathode side.

As the hydrogen molecule encounters the membrane, the platinum catalyst forces it to split into electrons, which deliver current to the electric motor and other vehicle components, and protons, which pass through the fuel cell stack.

On the cathode side, the protons and electrons rejoin and combine with oxygen to form the vehicle’s only exhaust pipe emission, water.

In contrast, battery electric vehicles are powered by rechargeable batteries, the ones at Melrose Arch in Johannesburg recharging the battery in about 2.5 hours versus the 2.5 minutes required to fill up FCEVs, which have ranges of 600 km and more.

Unlike the controlled chemical reactions in fuel cells and batteries, petrol combustion is marked by a series of uncontrolled chemical reactions that produce NOx, SOx and particulate emissions that negatively affect air quality.

A conventional combustion engine uses less than 20% of the chemical energy in petrol, which means more than 80% of the fuel is “wasted.”

Fuel cells, on the other hand, convert up to 60% of the chemical energy in hydrogen to drive the vehicle, making FCEVs potentially three times more efficient than the traditional internal combustion engine.

FCEVs thus achieve the beneficial characteristics of both conventional and battery electric vehicles when it comes to long range, fast refuelling and zero emissions.

Ahead of National Hydrogen Day, the California Fuel Cell Partnership reported that FCEVs provide customers with a no-compromise electric-drive vehicle with longer range, quick refill, high performance and comfort, along with zero emissions and a low-carbon and potentially renewable fuel.

It said further that organisations across the US would hold events and use social media to raise awareness about fuel cell and hydrogen technologies to mark National Hydrogen Day.

“The future is now. As fuel cell electric vehicles become available in the showroom, stationary applications continue to grow, and other markets such as material handling are taking off. We will celebrate the contributions fuel cell and hydrogen energy technologies have made towards our nation’s new energy future,” Fuel Cell Hydrogen Energy Association president Morry Markowitz was quoted as saying – comments that a platinum-producing Southern Africa should be building on in order to reinforce the position of a group of metals not only capable of catalysing new, clean vehicle mobility but also catalysing clean electricity and heat.

Edited by Creamer Media Reporter

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