Every Friday, SAfm’s radio anchor Sakina Kamwendo speaks to Martin Creamer, publishing editor of Engineering News & Mining Weekly. Reported here is this Friday’s At the Coalface transcript:
Kamwendo: Investment in platinum has rocketed, the World Platinum Investment Council reported this week.
Creamer: In the three months to the end of September, the investment in platinum has rocketed by nearly 300%. We see that this rocketing is based on the fact that when you talk about hydrogen, you talk about platinum, and countries are preparing for the new hydrogen economy in the long-term, so they want to get their hands on physical platinum now. Also, world risk at the moment is resulting in people wanting to get their hands on something beyond currency.
They look at the price of gold and then they look at the price of platinum and they see that the price of platinum currently is so much lower than the price of gold and that it really is the right time to buy, which they are doing. They also look at the price of palladium versus platinum and they know that platinum can replace and substitute palladium and they see that as a very good reason to get their hands on platinum. Platinum investment has really rocketed in the last three months and it looks like that momentum will continue, because just about day now we hear of another country that is embarking on a hydrogen economy.
There are now 70 countries that have put their weight behind introducing a hydrogen economy. When they say hydrogen, investors hear platinum and the moment it uses platinum, it benefits South Africa. So, it’s very good news.
Kamwendo: A South African mining company has overturned a major lawsuit brought against it in the United States.
Creamer: That’s right. In the United States, South African company Sibanye-Stillwater was faced with a class action, a lawsuit brought against bit by investors in its shares through the American Depository Receipts.
When you buy shares in Sibanye-Stillwater in America, you do so by acquiring American depository receipts, and it was depositary receipt holders that brought the class action against Sibanye, claiming that the company had misled them after there were fatalities in a gold mine incident in South Africa. The American depository receipt holders claimed they had been given misleading information about the safety of those working in the mines.
Sibanye-Stillwater contested case and defended itself so well that even when these litigants wanted to introduce an amended version of what they had originally outlined, the Federal Court said no, the case has ended. So, the class action has been lost. We know that in South Africa, most mines place great emphasis on safety and go all out to have safety in mines.
Kamwendo: Anglo American this week increased its investment commitment to South Africa, despite Covid.
Creamer: Yes, this week’s South African Investment Conference organised by President Cyril Ramaphosa drew in quite a few surprising new investments by new companies. Because of Covid, some suspended their commitment, but all-in-all there was R109-billion committed, which takes South Africa a long way towards the target of more than a trillion rands worth of investment commitment over ten years.
Anglo American itself has up to now committed R85-billion worth of investment over a five year period. They increased that by another R15-billion to take it to R100-billion up to 2025. All-in-all, despite Covid there were some positive signs that investors are still backing South Africa as an investment destination and seeing South Africa as a gateway to Africa as well.
With the African Continental Free Trade Area coming up in January, South Africa could really be an important base from which to set up investment and use as a springboard into the rest of the African continent.
Kamwendo: Thanks very much. Martin Creamer is publishing editor of Engineering News & Mining Weekly.