Platinum is a noble, heavy, soft and ductile grey-white precious metal.
In the family of precious metals, gold and silver are not the only ones to attract the interest of investors and industrialists. Platinum, this “little silver” discovered by the Spanish conquistadors, has properties that allow multiple uses in industry, particularly automotive. It will also play an important role in the energy transition. It has become an increasingly sought-after investment metal over the past ten years.
Introducing platinum
How was platinum discovered
The smooth appearance and shine of platinum nuggets are reminiscent of those of other precious metals. So much so that when the Spanish conquistadors discovered it in South America in the 16th century, it was easy to make a mistake: platinum first aroused their interest, before being left aside and called “platina”, or “small silver”. This platina, difficult to work because of its density, did not really attract the conquistadors, even if pre-Columbian civilizations already used it for their precious objects.
On the other hand, platinum interested scientists. In particular the explorer Antonio de Ulloa in the 18th century, then the physicist William Hyde Wollaston in the 19th century. The British chemist carried out research work and it is to him that we owe the discovery of the family of platinoids, which includes platinum, palladium, rhodium and iridium.
Platinum is a stable, resistant and dense metal. In addition to its physical appearance, platinum has chemical characteristics similar to those of other precious metals. This also explains the interest of industries!
Platinum is even denser than gold and silver. Like copper, silver and iron, platinum is one of the transition metals. It has a very high density, even higher than that of gold (21.45 g/cm3, while that of gold is 19.32 g/cm3). It only melts at a very high temperature: 1,769°C. This explains why the conquistadors quickly gave up working with it. In furnaces, gold melts at 1,064°C, and silver at 961.8°C.
Platinum is both strong and malleable. The precious metal has other properties: it resists corrosion and oxidation and is unalterable. Its very high melting temperature allows it to withstand extreme heat conditions. And at the same time, it is ductile and malleable: platinum can be stretched without breaking.
It is also distinguished by its stainless properties. Pure metallic platinum is currently mined in small quantities, except perhaps in South Africa, the world’s largest producer. 80% of the platinum still mined comes from this southern African country. The largest platinum deposits are located in Johannesburg and Rustenburg, where the world’s largest platinum mines are located.
The rest of the production comes from Russia, the United States and Canada. In addition to these extracted quantities, it is interesting to note that this precious metal is also mined as a by-product in copper and nickel mines.
First, electrolysis is used to separate the more noble platinum from the less pure nickel. This type of process for extracting and purifying the metal is called refining. In the laboratory, platinum can also be obtained by annealing hexachloridoplatinic acid: during this process, the metal accumulates in the form of a platinum sponge.
A total of five metals fall into the category of platinum. This is because the chemical behavior of these five metals is very similar to that of platinum, so separation and purification were previously very difficult. In 1803, iridium, osmium, palladium and rhodium were discovered, followed closely by ruthenium in 1844.
According to the statistics portal Statista, more than 3,000 tons of gold were mined worldwide in 2023. Platinum production was only about 180 tons. While gold has a stock-to-flow ratio of over 70, platinum has a stock-to-flow ratio of around 0.9, so it would take only about nine months for current platinum production to double the current stock.
Under these conditions, the mine supply of platinum is considered to have about 60 times more influence on the price than the mine supply of gold. In the case of the latter, the stock of gold on the surface, i.e. current stocks, has a greater influence on prices.
The low stock-to-flow ratio is a reminder of the industrial nature of platinum. The main demand for platinum comes from industry, with the automotive industry in particular being a major consumer.
Industrial uses of platinum
Such characteristics make platinum a particularly sought-after metal in certain high-tech industries, but also in the automotive industry. But did you know that platinum is also part of the components of jet engine injectors, or high-temperature furnaces? Remember: it resists melting temperatures much higher than those of gold or silver
Catalysts, for which platinum is an important component, also play a key role. It is estimated that over 40% of global demand for platinum is for catalysts. The jewellery industry is also experiencing high demand.
This precious metal is also used elsewhere in industry: pacemakers, heating conductors, fuel cells, thermocouples, writing nibs or even for drugs in cancer treatments (chemotherapy). Platinum and palladium will also play a decisive role in the development of the use of hydrogen fuel cells. We think of cars but also trucks, trains or cargo ships. Platinum is used to transform gas into electricity. It is also a key element in hydrogen fuel cells.
These industries are not the only ones turning to platinum. The metal is also used for medical purposes: in dentistry for example, or for certain chemotherapy treatments.
Investing in platinum
Since platinum has a very high intrinsic value, it can be used as a physical investment, for example in the form of ingots or coins. However, it is relatively difficult to invest in physical platinum because it is so difficult to find from dealers, so much so that even the largest suppliers can only obtain it irregularly.
As with gold, there are three main options for storing platinum: in physical form, it can be stored directly at your home. It is also possible to deposit the goods in a bank or with an independent safe deposit box provider not affiliated with the banking system. Ingots, coins or other granules are suitable for such storage.
The advantage of platinum is its high value density, which allows a very high value to be stored even with very little metal. At the same time, platinum has become known worldwide as an industrial metal, which therefore enjoys high liquidity. However, this value is lower than that of gold, which is why the spreads for platinum are larger. The disadvantage of this precious metal is certainly its great dependence on industry, and in particular the automotive sector.
Platinum, a metal of the future
Like gold or silver, platinum is one of the metals whose price can be influenced by industrial demand. In the case of platinum, demand from the automotive industry is currently rather down: petrol or diesel cars, which use catalytic converters, are not exactly doing well. On the other hand, demand is increasing for electric mobility and electricity storage. And here too, platinum is a sought-after component.
These are materials linked to the green hydrogen market. This is why demand from industry alone remains an important underlying factor in the price of platinum.