With Palladium hitting a new all-time-high price, Platinum Group Metals (PGMs) become more relevant than ever. New research suggesting more use applications for these metals, paired with the already existing positive supply and demand forces behind PGMs are driving investor confidence.
Anglo Platinum and Platinum Group Metals Ltd launched a new venture called Lion Battery Technologies in 2019. Research suggests that with the use of PGMs, namely Palladium, battery storage can be improved by 30% according to an interview with Benny Oeysen. This has the potential to drive up demand for palladium in a new application and electric vehicles by extending their range and making them more cost effective. The new venture, Lion Battery, between Anglo Platinum and Platinum Group Metals Ltd. aims to accelerate the development of future generation battery technology which incorporates PGMs. The new venture is in agreement with Florida International University to advance the research being done.
A current concern amongst those invested in PGMs is the reduction in demand for PGMs as the traditional drive train (internal combustion engines) is slowly replaced by electric vehicles (EVs). PGMs are used in catalytic convertors. In the short run it is expected that demand for catalytic convertors will rise as the Biden administration is adding stringent regulations on emissions. However, the market is concerned on the use application of PGMs once EVs dominate the choice of vehicle for consumers and catalytic convertors become obsolete. Lion batteries will address this concern by giving PGMs a new use-application.
PGMs can also be used in the processing components of computers. 3rd Gen computers will utilize PGMs and become more energy efficient and faster than modern computers according to Anglo Platinum executive head. Bitcoin mining requires lots of energy which is one of the arguments against the utilization of the digital currency. With the help of PGMs in next generation computers, Bitcoin mining may become more energy efficient which leads to improved cost effectiveness of bitcoin mining and utilization. Can PGMs help with mass bitcoin adoption? We think PGMs may help facilitate the adoption by addressing environmental concerns of bitcoin related to its energy consumption.
Another suggestion of increased demand for PGMs is the emergence of new Fuel Cell EV (FCEV) research. FCEV previously faced challenges when it came to mass adoption due to infrastructure problems. Umicore and Anglo-American Platinum announced a research drive to simplify hydrogen storage and use in fuel cell electric vehicles. Fuel cell powered vehicles use Palladium and Platinum and in fact require more catalytic material than traditional gasoline and diesel-powered vehicles. More on hydrogen fuel cell power.
New Age Metals represents a unique opportunity for investors in that it provides commodity exposure to both PGMs and lithium in its project portfolio and offers investors mining lifecycle leverage in the form of exploration and development at its projects. This commodity diversity suits the needs of the auto industry as it is today, being largely dominated by traditional drivetrains, as well as the transition to electric transport and is well positioned to accommodate for future innovation in the auto industry, whether that be in the form of FCEVs or EVs fitted with next generation batteries that utilize PGMs.