The Challenges Faced by Deep Platinum Mining

The Sudbury Basin in Central Ontario, northern Quebec, and Manitoba hold Canada’s sources of  platinum group metals. Although 60 percent of the world’s platinum comes from the Merensky Reef in South Africa, Canada together with the United States, Russia, and South America are also large contributors. Platinum is rare and often  found clustered with other metals which makes extracting and processing a tedious and expensive proposition. Platinum is used mainly in vehicle catalytic converters, in fuel cells, jewelry, and other industrial applications such as computer hard disks, pacemakers, and sensors.

 

The environmental impacts and economic cost of mining the mineral are common concerns for stakeholders. The most obvious problem is the high cost of operations due to the remote locations of the mines. Most platinum mines are found in areas where the temperatures are elevated. This entails constant cooling which corresponds to large operating expenses.  The deeper into the earth platinum is mined, the hotter it is going to be, increasing consistency of cooling.

 

The oversupply of platinum in the world market is another challenge for existing players. A study by Deloitte released in 2012 finds that there is a “structural oversupply” of platinum in the years to come which will keep the metal at a modest price of $1450 to $1750 per ounce. This won’t be enough to sustain operations, eventually leading buyers to pull their investments. The recent South African mining crisis is an example of the dire effects of what such a scenario would bring.