Platinum Output to Drop 15% by 2034 as EV Adoption Slows

Sibanye Stillwater Forecasts Significant Platinum Production Decline by 2034

June 4, 2024 — Global platinum production is on track for a substantial decline over the next decade, according to a new forecast from mining giant Sibanye Stillwater. The South African company projects that mined platinum output will fall by approximately 15% from current levels by the year 2034. This anticipated drop is closely tied to a slower-than-projected global transition to electric vehicles (EVs), which is unexpectedly extending the demand window for the precious metal used primarily in catalytic converters for internal combustion engines.

The forecast, presented by company executive Kleantha Pillay, indicates a steady downward trajectory for platinum supply. Annual production, which stood around 6.2 million ounces in 2019, is expected to shrink to about 4.7 million ounces by 2034. This trend is already visible in near-term estimates from refiners like Johnson Matthey, who see output dipping to 5.46 million ounces by 2026 from 5.56 million ounces last year. The core issue stems from the dominant position of South African miners, who supply roughly 70% of the world's platinum. Faced with uncertainty over long-term demand from the automotive sector, these producers are hesitant to invest in new mining projects, leading to a natural decline as existing reserves are depleted.

A critical factor underpinning Sibanye's revised outlook is the tempered pace of electric vehicle adoption. The company's analysis suggests that EVs will constitute only about 35% of global car sales by 2034, a figure notably lower than the 50% share projected by the International Energy Agency for a similar timeframe. "Every year for the last four years, the battery electric vehicle forecast has been tweaked downwards," noted Pillay, highlighting a consistent industry pattern of scaling back optimistic EV rollout timelines. This recalibration is creating a more complex demand landscape for platinum group metals (PGMs).

Recent policy shifts in major economies are contributing to this "buying of time" for traditional engines. Pillay pointed to the European Union's decision to ease emissions targets last December and the U.S. Environmental Protection Agency's proposal to delay the enforcement of stricter vehicle pollution rules. These regulatory adjustments reduce the immediate pressure on automakers to completely phase out combustion engine vehicles, thereby sustaining the need for autocatalysts that use platinum and palladium for a longer period than previously anticipated.

The supply-side story extends beyond platinum to its sister metal, palladium. Sibanye's forecast includes a parallel 15% decline in palladium production, expecting it to fall to around 5.6 million ounces by 2034. Palladium, which has often been substituted for platinum in gasoline-engine catalysts, faces similar market dynamics. The concurrent decline in both primary metals signals a potential tightening of the overall PGM market, which could have significant implications for automotive manufacturing costs and global commodity trading.

Exclusive Analysis: The Recycling Buffer and Market Resilience

Beyond the primary production forecasts, a key stabilizing factor often overlooked is the secondary supply from recycling. Sibanye expects recycled PGMs—reclaimed from scrapped catalytic converters and other industrial sources—to remain steady at approximately 5 million ounces annually. This consistent stream of metal acts as a crucial buffer, preventing market balances from being drastically upended by the drop in mined output. Analysts suggest that the efficiency and scale of the recycling infrastructure, particularly in North America and Europe, will be a major determinant of price volatility and supply security in the coming decade.

The long-term implications of these trends are multifaceted. A tighter platinum and palladium market could lead to increased price volatility and supply chain challenges for automakers, potentially affecting vehicle production costs. It also raises strategic questions for mining companies and investors about the viability of new PGM projects versus diversifying into metals critical for the battery-driven EV future, such as lithium and cobalt. The evolving narrative is no longer a simple story of EVs eradicating PGM demand, but rather a nuanced transition where policy, technology adoption rates, and existing supply constraints are creating an extended and unpredictable market cycle for these critical metals.