For the first time in history platinum is now cheaper than gold. Platinum used to trade at around 100 percent premium to gold during the last decade and was even more expensive prior to that. Just recently (at the time of writing) gold was 150 dollars an ounce more than platinum.
This is extraordinary when you consider the following.

Platinum is an extremely rare metal, occurring as only 5 ppb in the Earth’s crust and, although gold is comparatively rare (4 ppm) it is still more plentiful than platinum. The annual supply of platinum is about five percent of that of gold. Most deposits are located in such countries as Russia and Zimbabwe with smaller deposits elsewhere including Australia. The price of platinum has declined so much now that it costs, on average 50 to 100 dollars more to produce platinum than the spot price.

In fact not long ago, South Africa’s Anglo American Platinum, the world’s biggest platinum producer, stated production costs of platinum will reach $1,567 per ounce this year, this despite the price rolling around $1,500 per ounce.

Platinum is so rare that all the platinum that has even been mined would fit into a decent sized bedroom. It takes around ten tonnes of ore to refine one ounce of pure platinum and about eight weeks to refine enough platinum to make a ring.

Platinum is also used in industry such as, heart pacemakers, hard discs of most PCs as well as a variety of electronic uses. Platinum is resistant to attack from most chemicals, is hypoallergenic, resists tarnish and is one of the world’s strongest metals used for jewellery and is extremely durable.
Platinum is often found free in areas of the Americas and alloyed with iridium as platiniridium. The platinum arsenide, sperrylite (PtAs2), is a major source of platinum associated with nickel ores in the Sudbury Basin deposit in Ontario, Canada. The rare sulfide mineral cooperite, (Pt, Pd, Ni)S, contains platinum along with palladium and nickel. Cooperite occurs in the Merensky Reef within the Bushveld complex, Transvaal, South Africa. South Africa is the largest producer of platinum in the world.

Platinum, often accompanied by small amounts of other platinum family metals, occurs in alluvial placer deposits in the Witwatersrand of South Africa, Colombia, Ontario, the Ural Mountains, and in certain western American states as well as Australia.

All these factors contribute to a potential increased demand for platinum, not just in industry but also for investment and jewellery and, as the supply drops a balance will be created and the price will increased making it worthwhile again to invest more into platinum production.
It is likely that 2012 is going to be a good year for platinum.

Incidentally, the definition of a metre for a long time was based on the distance between two marks on a bar of a platinum-iridium alloy housed at the Bureau International des Poids et Mesures in S??vres, France. A platinum-iridium cylinder serves to this day as the standard of the kilogram and is housed in the same facility as the metre bar. Platinum is also used in the definition of the Standard hydrogen electrode.

This entry was posted on Saturday, January 21st, 2012 at 10:56 am.