Almost everything you touch and interact with daily relies on one thing: the Platinum Group Metals (PGMs). While we may not always be aware of it, our modern lifestyle would be impossible without these six critical elements. From the chips that power your phone to the catalytic converter in your car, PGMs play a key role in enabling a clean, modern world. As we continue with rapid technological innovation, the demand for these precious metals is set to rise. Their unique chemical properties, such as corrosion resistance and extremely high melting points, make them irreplaceable.
The major challenge with PGMs is their limited availability. PGMs are found in scarce quantities in the Earth's crust and are being depleted rapidly. These metals are concentrated primarily in regions like South Africa and Russia, which hold more than 96% of the world's accessible reserves.
Accessibility depends significantly on depth. Mining at great depths is not cost-effective and poses significant technical challenges. For example, ore extraction more than 2.5 km underground is difficult due to rising temperatures. For every kilometer of depth, temperatures increase by about 30°C, meaning that at a depth of 2.5 km, temperatures can reach around 150°C. This requires specialized equipment and conditions for both machines and humans to operate.
The concentration of ore, or the amount of PGMs per ton, plays a crucial role in determining mining feasibility. A key metric for economic viability is the “cutoff grade”—the minimum grams per tonne (g/t) of PGMs required to justify extraction costs. Typically, a cutoff grade of about 2 g/t is the general standard for PGM mines, reflecting the geological conditions and processing techniques needed for profitable mining. Mining with an ore grade lower than this makes it economically unfeasible to justify the cost of removal and processing.
These factors are interdependent. Ore grade often varies with depth. Consider two prominent African PGM deposits: Zimbabwe’s Great Dyke and South Africa’s Bushveld Complex. In the Great Dyke, shallower PGM deposits, with depths up to approximately 500 meters, have lower ore grades, ranging from 2 to 4 g/t. In contrast, the Bushveld Complex contains deeper deposits (1,000 to 2,500 meters) with higher ore grades, averaging 5.3 to 7 g/t.
Commodity mining, including PGMs, faces significant economic challenges. Let’s examine the "All-In Sustaining Costs" (AISC)—the total cost of producing a commodity. If the AISC exceeds the commodity's value, the mine becomes unprofitable.
In 2023, platinum prices averaged between $946 and $970 per ounce. In Zimbabwe’s Great Dyke, Impala Platinum (Implats) reported an AISC of $1,035 per ounce for FY2023, while Anglo American Platinum (Amplats) in the Bushveld Complex had a slightly lower AISC of $957 per ounce. With razor-thin margins, Amplats' margin dipped as low as 6%.
The challenges are evident in the Stillwater Complex, the only PGM mine in the United States. In September 2024, the Stillwater West section closed due to negative margins, highlighting the difficulties of operating commodity mines with small profit margins. Even minor macroeconomic shifts can turn a profitable venture into a loss.
PGM mines not only operate on thin margins but also cause significant environmental damage. These mines are a major source of carbon emissions. The reason lies in the final step of mining: leaching. For leaching to be effective, very small particles of rock are needed. To crush the rock, large machines, typically powered by diesel generators, are used. On average, 40 metric tons of CO2 are produced to mine 1 kg of platinum. In 2023, an estimated 625,000 kg of PGMs were mined, generating approximately 25 million metric tons of CO2.
Carbon emissions are just one of the many environmental challenges associated with PGM mining. The process also requires substantial water usage. On average, each kg of PGMs requires 743 cubic meters of water, totaling around 467 million cubic meters annually—equivalent to 185,000 Olympic swimming pools. The water becomes contaminated with toxins during mining, posing a serious environmental threat unless it is properly treated.
Mining companies have made efforts to reduce their environmental impact through projects focused on water recycling, improved power sources, and land rehabilitation. However, the high costs and thin profit margins in the industry often limit the extent of these efforts.