SFA (Oxford) is a world-renowned consultancy specialising in critical minerals and metals for the energy transition. Since its inception, SFA has informed stakeholders with a comprehensive approach across value chains working with miners, processors, OEMs, end-users, recyclers, investors, trade associations, and governments. SFA has a long history of providing strategic insights and analysis to clients globally, helping in decision-making and market navigation. The diverse skills of the SFA team and their global consultants ensure they can deliver across industry sector a wider suite of critical metals and minerals.
SFA provides expert advice and strategic solutions that reflect its longstanding commitment to policy and commercial leadership, ensuring alignment with the challenges of today’s fast-evolving energy landscape. With a proven track record of consulting across the business cycle, including engagement with investors, start-ups, mergers and acquisitions, joint ventures, divestments, and policymakers, SFA remains at the forefront of supporting global energy transition objectives.
Drawing on extensive experience in energy markets, initially rooted in critical metals, SFA offers a balanced perspective on carbon-intensive and net-zero technologies. Its approach combines legislative, technological, economic, and commercial dimensions to deliver tailored, data-driven analysis.
SFA’s work acknowledges the intrinsic interconnectedness of key elements on the periodic table, from their geological origins and processing pathways to their end-use applications. As next-generation energy technologies increasingly depend on these elements, SFA’s deep supply chain analytics provide essential insight to inform strategic decision-making.
This video is brought to you by Axo Copper. Hello, welcome back to Mining Network. I’m joined again with Hank Dehulp, the CEO of SFA Oxford, one of the world’s leading researchers in PGMs and battery metals. Hank, good to be with you again. Peter, great to be with you again as well. Uh, look, I understand you’ve just come back from uh quite a long trip to Shanghai during Shanghai Platinum Week. What What are the main findings out there? First of all, it’s the fifth edition of the Shanghai Platinum Week. It’s really growing in significance um sponsored and set up by the WPIC that promotes investment in platinum. But the interesting bit is that um there were quite a few more primary producers attending this year. You can see the momentum building there. Um a lot of information was shared as well on future automotive developments and uh PGM demand developments in China, a lot on the fiberglass industry, a lot on fuel cells. And the interesting part was also it was combined with site visits. So we visit the Chinese car manufacturing plant and importantly because that’s where the action was in platinum over the last few months. Um jewelry manufacturers, jewelry wholesalers and the retail sector as well on jewelry. Um it’s quite clear that um in platinum China started sucking in quite a bit of metal in the early part of the year March, April probably the peaking season of that. What happened was that because the gold price had risen so extremely high. A lot of the gold sales were starting to fall off the retail sign because people were thinking it was getting too expensive and some manufacturers decided then let’s see if we can get sell platinum instead because it was actually cheaper than white gold. Um they’ve been buying a lot of metal turning that into jewelry has gone to wholesalers. The wholesalers are now putting it in the shops. What is not clear yet will the consumers buy that in the volumes that is now being put on display. What is also not clear yet will that distribution expand into China because for now it’s a lot of it is concentrated in Shenzen which is the art of jewelry manufacturing in China. Um the good thing is there’s now 30 or 40 manufacturers making platinum jewelry. Again that was before this price run less than 10. So there’s certainly a broadening of uh of uh product sets and designs coming to the market. What is also quite clear when you visit the malls which are are very large extensive malls with just jewelry shops that the bulk on display is still gold and you have jade, you have pearls, you have colored stones, diamonds and you have some platinum. So getting attention in a a very busy over uh or or very rich consumer choice market um is still going to be a hard push. But the good thing is at least that has now pulled in enough platinum on this place hopefully to gain a bit of momentum. A lot will depend as well will the prices of platinum hold up because a lot of this jewelry does get bought as an investment. You literally weigh your piece and then you add a labor charge which is far less than in western jewelry shops um and then you sell and they can trade it in quite quickly as well. There’s obviously a differential there but um if platinum grow or rises steadily it will be very positive for platinum jewelry sales. The other interesting aspect was that as gold was starting to peak or start to flatten out, investment demands shot up. So, investment bar production is ramping up at a hectic pace. That takes liquidity out of the market. Essentially, people buying investment bars, putting it away. Um there were some scary numbers mentioned by one CEO of a recycling company who uh himself plus his friends were putting away literally hundreds of kilos of platinum. Um these are big numbers. So I um um I think that China pulling in platinum draining some of that liquidity or putting uh making the liquidity worse um that prices that we see in platinum has helped to boost the price as well. Um the question for everyone I guess is the sustainability that’s Chinese demand in terms of jewelry and and we’re seeing broader investment demand for for bars like you were saying there. Um India has turned into quite a big market on the other precious metals like gold and silver or we suddenly see some demand coming from from India at all. India’s been a a steadily growing market for platinum jewelry as well. But we shouldn’t forget it’s a primarily a gold market and there will be some effect from the fact that the gold price platinum differential is as high as it is. um literally if you you can calculate how much it will cost to make white gold versus platinum jewelry and it starts to become interesting to put platinum jewelry um into your stores again because that is cheaper and I think most um most benefit will have from that differential gold staying so high that will see people buying more affordable jewelry in this case platinum so it will be positive um it’s difficult to see if that is going to do to go to the scale that China used to be. I think it’s a much more steady rise that we will see in uh in India. The benefit for platinum in general is though that it’s a much tinier market than the gold market. So you don’t need much of that gold swing to go into the platinum market have a much bigger impact. Um and that is what platinum could benefit from. Okay. Interesting. OB we’ve spoken a lot about the demand side here and what we’ve sort of what the impact has been on the price since the beginning of the year on the supply side though there have been some shocks haven’t there we there have been some disruptions in South Africa there is a planned mine closure in Canada how’s that how’s that looking because I’ i’ve seen figures looking like we could be moving into a 1 million ounce per year deficit um does that sound right to you there’s a couple of things playing in there um first yes the first quarter in South Africa’s is often weak uh in the first place. That is because it’s post Christmas, the minds need to restart. They’ll take normally two three weeks to get in their rhythm and then um you start producing again. Um what this time came together a couple of things. First um there was severe rainstorms in South Africa that closed a and flooded a particular mine a mandle belt that took a few months to recover. there were um stock takes and uh um maintenance cycles at various smelting complexes. What that does, it doesn’t stop the mine production, but it stops metal moving through the system and eventually come to the market. So overall metal production in South Africa in the first quarter was well down 20% 25% order of magnitude and being such a concentrated supply market that has an impact that on providing global liquidity and long-term contracts that they are committed to normally of preference so less metal flows to the spot market and then you have this surge in demand combining with that first China secondly tariffs in New York the threats of that um our tariffs in the US will have seen and there was evidence of that pulling in metal into the US ahead of tariffs um and that dislocation of where metal sits has quite an impact as well on the overall um dynamics in the market in South Africa. The second quarter was slightly better, but the first half overall for South Africa is not looking that great and um it is also the question and how does that move into the second half? Will they recover in the second half sufficiently um to supply the market again? Will that take pressure off the market? Um the mine in um Canada that was announced for closure is platium heavy. So it’s not necessarily a platinum market impact to a big extent. Also, that was not that outside expectations. What we knew that it was going to close probably by about 2027. That’s been moved forward by a year. It’s now looking at May 2026. Um, it was on a declining trend already. That that essentially that mine is economically not feasible anymore and it was already being scaled up. So, that wasn’t necessarily the shock. The shock was more on the South African side being so poorly in the first quarter and that then coming through the system. um in the months later. Hi, I’m Jonathan Egalo. My colleagues and I have been behind seven mining success stories over the past 20 years in Mexico. Most recently being GO Gold and Silver Tiger with a combined value of more than a billion dollars. Three years ago, we formed Axo Copper. On June 4th, we IPOed on the TSXV under the trading symbol AXO. Our Luerta project is a recently producing high-grade copper mine in Heliscoco, Mexico. When we picked up the project, previous operators had only mined to 50 m depth and about 150 m along strike. For us, the opportunity came to test the scale of the project, which we’ve already begun. The drilling has already achieved intercepts including 13.7 m at 5% copper and 7.6 m at over 7% copper. testing mineralization to a depth of 200 meters. We’ve tracked the system to 5 km along strike from surface sampling. We believe there are all the signs for there to be multiple high-grade copper systems within our 11,000 hectare license. We’ve just raised 11.5 million Canadian and have started a 15,000 m drill program with about 70% of that focused on the existing mine area and 30% to test regional targets. Over the next 12 months, we plan to test the scale of the project, giving us the information required to assess at what rate the mine should be restarted. As a new company, we would be honored to have you follow our journey as we test this new emerging high-grade copper district. I guess the main question is is how much of this is an artificial increase in price that we’re seeing because of tariffs because of sort of some some disruptions with mining that could potentially be resolved in the second quarter? Are we are you looking at this as a a long-term supply deficit, potential bull market for platinum incoming, or is this one of those market tweaks that will correct itself um before too long? you look back in history, these metals have had nasty spikes uh like a short summer and long winters. Um what you’ve had this time around, but were a combination of things. It was South African supply being disappointing. It was US tariff threats. It was Chinese reacting to very high gold prices and the manufacturers sucking in platinum. Investment bar switches out of gold into platinum as the momentum in gold was fading. So it was a combination of things. What the big question will be is that um will in the second half when primary recovers when potentially the damage from Trump um policies is starting to reflect in car sales. Remember a lot of platinum and also platium and roodium specifically are highly dependent on what happens in the car market. There’s already some quite scary numbers coming from the Stellantises, from Porsches. Um remember this is a multifaceted crisis that they have. It’s they’re a one of the big markets the US is is imposing big um uh tariffs on production coming from outside the US. It has um struggled in Europe with momentum. But the biggest impact on these car manufacturers is the Chinese market. they’re getting pushed out of the Chinese market and domestic brands are have gained 2/3 to 70% of the market there already and that’s a distinct policy as well in China. We we want to make sure our domestic brands actually um dominate in the domestic market and now go into the world. So they’re also facing increased competition as a result in the rest of the world. And if that momentum of um US tariff impact disruptions moves into the second half as well. You will find it hard to believe why padium and roodium prices should go up. Um platinum is a slightly different story. It really will depend on how the gold price behaves, how the Chinese consumer will respond because it’s clearly um a large market um potential for investment and jewelry and there is an increasing likelihood that this becomes a slightly more sustainable that China becomes again an important jewelry market for platinum. Um remember it was a very large market for platinum jewelry market 1015 years ago. We don’t think it will get back to that same scale, but it only has to go up 50% or double from this current size and the current consumption to make a real difference in the platinum market. So, of all the three metals, platinum, platium, rodeium, platinum has the best chance of actually holding up and it’s probably also the most sensible metal for the South African market because they’re normally historically dependent mostly on platinum prices. So at 1,400 1500 platinum a lot of the industry is back in the black. Um if palladium prices hold the current level, roodium prices hold the current levels, we don’t have a significant currency strengthening, it’s actually okay again. Um I don’t necessarily see them putting new capital in the ground. Um it needs to be a bit more sustainable. remember this has been a a very short period yet of higher prices and they probably want to look into the second half and into 2026 and the impact of Trump policies in general on world economic growth before they would commit any further capital. Even if they commit further capo, it will likely be picking up on sustaining capex again. So basically putting money back in that will keep the profiles um from declining faster than what they um initially were planning on with low prices. There are a couple of projects on the table in South Africa. Ivan Plats is one of them. Um Bonei is looking at a restart. Um there are um Zimbabwian projects like Karu that are waiting for better pricing. I think it will be a while before we get big decisions made on those because you need more comfort that this is not a flash in the pan and um the PGM sector had many flesh in the pan short brief periods of good profitability or we need to yeah have comfort that that translates in longerterm demand. Okay, that’s really interesting. Um okay, so it sounds like platinum at the moment is really it almost could find a baseline if gold holds up. Uh, and I guess it sounds like what we’re waiting on is to see whether or not the demand is there in China. They’ve made the platinum, now it’s really to work out whether or not the Chinese consumer is actually going to take it and buy it and store it. Interesting. Um, flipping over more to the US, it’s it’s a market. I remember when we spoke, I think last time you were on the channel was about 10 11 months ago, and we were talking about you’ve got these three core markets, right? You’ve got Russia, South Africa, and North America. Um, at the time obviously platinum palladium prices were around the 900 mark, 1,000 mark in terms of dollars. It was it was looking pretty dreary. Does does this now if if platinum can hold up above around the 1500 mark? Does this now lead to potentially one of these three dominant producers not having to sort of scale back as much as as we initially thought? Um, it could be. Uh first of all, Russia is a nickel and copper producer and they’ve got other issues. They have um quite a bit of debt, Narielsk, and their debt costs are going to run out of control if sanctions stay where they are. Um the domestic interest rates are in the order of 20%. Their foreign loans as they mature will become Russian um lending facilities and your interest rate uh costs will jump ahead. So they’ll probably burn cash but not because of PGM prices being low. It is more the financial structure of the company. The um US mine still water is still very palladium based and you need strength in the platium price. The platium price has risen interestingly. Um tougher to see why that would be as it’s basically being dragged up by platinum and many other metals silver included and is a US dollar weakness. Um there’s certainly not a sense that we see that people are planning bigger production runs in cars because remember platium is still 85% dependent on the automotive sector. Um there are though some um signals that in the US particular they want to get rid of some of the fuel economy standards. Um they’re bringing back a V8 here and there. There’s some strengthening of emission legislation coming in China. China 7 which is quite interesting because that market although it’s moving to EVs and NEVs um there’s still a very significant um combustion engine uh percentage of um the market and the overall market is still quite big. So, as they move to China 7 in 2027, um that has quite strict um NOX limits, quite strict cold start limits, limits that weren’t there before, and it will probably see 20 25% rise in uh buildings in China. They’ll do their best to thrift because it’s a super competitive car sector and they every little bit helps to protect margins, but there will be an increase in in loadings. US is where where where the offset is in the US and why um pleadium um um demand is is still like to be determined by the success of lack of success of it. His tariffs will r will raise car prices and there’s a very direct relationship. If your car prices rise, people buy less cars. So does the volume of cars. So even if they have still big V8 engines and we’re getting a bit more relaxed on pushing engines to be more fuel economic because we’re dis powering disempowering the the the the EPA for example and that possibly will come out over the next two three days as well. The EPA will say look we’re not want to control greenhouse gases. We’re not responsible or for as an agency to do that. So these fuel economy standards will drop. It it it shifts this whole EV momentum you had in the US into the future and it could be positive. But it’s you need car sales, you need car volumes. So um if the US um does provide a positive underpin for playing then still water will be around. It probably will not necessarily expand production, but I think it’s increasingly seen as in the US in particular, you’ve seen all these announcements on critical materials. It could well be that they will see this mine is too important for the US. Um, we don’t want to be dependent and it’s a unique or body. You shouldn’t forget that as well. It’s a very high rate on soil or body, but you need one way or another a a a to find a way and a part of it is to tax credits that they’re getting to keep it alive because it’s burning cash. So, it it’s it’s unlikely that it will come off, but I’m also not seeing necessarily signals that they’ll say, “Okay, let’s double production.” The one aspect that could still happen is there is um some work being done by some congressmen in the US to see if they could um either put tariffs or ban Russian platium coming in uh into the US and there’s not enough palladium being produced domestically either from recycling or from still water. So it might then um um have enough incentive of a localized higher padium price that could help perhaps still water. Um again expanding is not that easy. um they’re obviously half production um after all the um the pressure they had on saving costs but skills in the US are very scarce and you don’t easily find people that have the skills to actually do the the type of work that is required at the order that’s a general issue in the US in South Africa I I will there’s there’s a natural decline that has set in um partly because the big ‘s minds are now hitting 50, 60, 70 years old that that dies. Part of it that dies and the replacement of that is far more time consuming, capital consuming than what it used to be because the mines have gotten deeper. I don’t think we’ll sink another 2 km deep shaft in South Africa in that industry. But there are projects out there that could help to slow that decline. But there is some baked in decline already which is difficult to stop even if you put money in it. And then one of the other topics we were talking about in regards to Russia obviously like you were saying it’s this is byproduct from nickel right but the one one of the impacts of tariffs um and trade sanctions was that they were finding it quite tough to to get equipment into the mines that just general equipment that you would need for refurbishments and and sort of sort of just to to keep things running. Has that had much of an impact as well as these tariffs? Um, it has. There’s definitely in the latest statement as well, you can read between the lines there. There are comments on that. We know as well that um there’s been a lot of Chinese equipment going into Norill um and into the the mines. There have been issues with software for example in directional drilling software that wasn’t as good as what it replaced the sandb and they had to spend quite a bit of time and Russians are good at software and anything it so they will fix that but it has caused disruptions because this is still a fantastic old body. Um you will need to get it right. It will likely have caused disruptions on when equipment breaks, will the parts be there? Is the knowledge on actually fixing these quickly and and efficiently? Will they last? Is durability um um similar? It’s a it’s a phase they’re going through. We we expected that to happen. We thought they were through it, but clearly it is still an issue. Um and we’re also now 3 years in since that equipment called ban came in. you’re now getting to the stage where a larger and larger proportion of the fleet of ex-western equipment is starting to basically become unusable and you depend more and more on the replacement equipment and perhaps we’re in that phase where we’re now um starting to the buy or the the the dependable portion of the fleet is now starting to to get phased out and uh we’re now depending on the more riskier part of their portfolio. So I’d imagine they’re they’re now sort of much more reliant on Chinese equipment um and mining. Yeah. Yeah. Okay. Interesting. Um just just one one last question on on the upside for platinum is something that we used to talk about quite a lot probably around four or five years ago was the hydrogen economy um and and the use of platinum within that. It still seems like it hasn’t really taken off. Is is there a is there a silver lining with platinum moving forward? The one silver lining is is probably China. China is still pushing that quite hard. They’ve got national targets. They have um quite impressive national targets as well. The bulk of the remember where we get platinum demand is either the electrolyers, the machines that make hydrogen um or in fuel cells, the machines that are particularly in the mobility side that gives you volume. Um China has different ways of actually decarbonizing and cleaning up the fleet. Um they have essentially uh already quite a big percentage of trucks on LG. So gas that’s one they have started to introduce electric trucks but also on a swapping basis. So you basically don’t then need this mother of a battery on a truck. You basically for every 150 250 miles you have a replacement pack that goes in in five minutes and you carry on. um that is already being implemented as well on certain routes and they have obviously the standard diesel trucks. What they want to introduce is more and more hydrogen trucks in that scheme as well. Um they have presented u there’s a good presentation on that with lots of detail on how they plan to do that and that is the one number that still sticks out. I think in the west it’s going to be a far bigger struggle. We we’ve seen quite a few projects being taken off the table. And that’s where you get a bit of a skewed news flow is when all the hydrogen projects get announced. There’s lots of red ribbons and ministers uh cutting them. When they get taken off the table, that’s done very quietly. But we follow that in quite a bit detail and and some really important projects backed by some big oil companies are getting taken off the table. The green steel initiative in Germany is now at the point of dying. Um there were some big projects around refineries that have been taken off the table or scaled down or postponed. So it there’s a bit of a reset. Trump has obviously had something to do with it that that taking off benefits a lot of the defense spending that needs to now come in also makes you having to make choices where do we spend this money and I think an important factor is the reality has set in. Um a lot of this was designed by politicians and not necessarily by engineers. And hydro is not easy. It’s it’s it’s a it’s it’s a gas that um you need to compress at 350 or 700 bar if you want to distribute it in retail. Um quite a few of the stations that are there are often faulty. Um they haven’t actually had that reliability that you need for people to depend on it. But Europe still has big ambitions to roll out that infrastructure. Um but it’s got some way to go. So we don’t have necessarily um big numbers in this decade. Some numbers between 2030 and 2035 and hoped for numbers between 2035 and 2040. But it’s the technology is moving so fast and particularly electrification. We’re getting in the UK now the thousand kow charges that BYD has introduced in China that will get your car charged 400 km in 5 minutes. So would you bother still with hydrogen passenger cars? Probably not. Heavy duty, yes, you can still see a solution there. But um before it translates in big platinum numbers, um China will take the lead in my my view. Is is there a chance that this silver battery that Samsung has developed, I know that you look at the EV side as well, it obviously that’s that’s pegged to have what 700 miles or so of radius. Um, is the battery technology now just getting so advanced that it it does sort of counteract this this this hydrogen alternative? It is um it’s being made much cheaper as well. So LFP has really started to dominate battery production. The Chinese started with that and that’s now moving into the west as well at speed. Um, and the diversity of the science is also improving. So, as more and more people drive EVs, some will say, “Okay, I actually don’t need a 600 km range. I don’t need to pay for that. I I’ll pay for a 350 km range because that’s in my use case working.” And you can go for a a cheaper entry model. And other issues around fast charging, a lot of people realize, hey, I’m charging at home anyway, so I’m not necessarily paying up for that fast charging capability. There’s cold climate issues and you can find a solution nowadays for that as well. So the diversity of choices you’ll have in the years ahead. We’ll move from currently maybe five or eight different battery types. You’ll have over 100 probably in 10 years time where you can pick what you want. You want to pay up for fast charging and big range. That’s the the the ch the technology you’re moving to. And hydrogen will have a role but not necessarily in passenger cars. I think a lot of um people are coming to the realization that the battery technology that the Chinese are now sitting on is so advanced and moving so quickly that it’s it’s going to be hard to justify. Previously the justification was always charging speed and range. You’ve lost that that that advantage. You now still have to produce a car fuel cell car that is cheaper than the EVs out there. EVs used to go at a premium. They are becoming cheaper and that differential is difficult to catch up now because fuel cells are not easy. They the technology is mastered. The tanks are mastered. Um it still needs a battery as well. Um but as a mass product um EVs have won the game um in light duty. Heavy duty bit of a difference still. Um and there’s still options there and a market share that we can see. But it’s not going to be all or nothing. It’s going to be a combination of technologies. Okay. Interesting. But just just reverting back to to platinum, I’m really fascinated with this platinum and gold relationship. Um you mentioning that the white gold market, which is obviously the cheaper market in gold for jewelry. Um because platinum was underneath sort of under that price and it was becoming more attractive. What do do you know? Were you told in China how much it cost to produce the white gold in jewelry versus the platinum? And and I guess is that really now the ceiling in terms of the platinum price if if we do continue to see this demand in jewelry from China? It’s um so there’s a couple of things. Platinum is not easy to work with. Um it wears down your equipment quicker. There’s melting temperatures. um you’ve got um productivity numbers that are probably 30 or 40% of what gold is. So if you make a gold piece uh or you have a production capacity of a gold plant, your platinum production capacity in that jewelry plant will be about 40%. That’s the numbers in in in China. Um, still if you looked at before platinum started to run, the white gold versus platinum jewelry differential in what it would cost to put it on the shelves was close to 40%. It’s now shrunk to closer to 20 15%. So the differential isn’t as obvious anymore. Um, and it is including labor and the processing of the different metals in white gold as well. Um, so you you do um still have a benefit. Um, but it is not as staring and glaring at you as what it was before. Um, why they’re putting it on the shelves. And that’s important to remember as well. Because of the high gold price, they were selling a lot less gold jewelry. People are waiting. And is this a way of getting cheaper material on the shelves and convincing people to buy something differently in order for this industry to recreate some volume and it’s not platinum specific. They would just want to sell jewelry and and they’ll put on the shelves what sells. So that’s the the benefit they looking at currently. Is is there a chance that if if the consumers do turn up in China and they do like the platinum market or they do like platinum jewelry, this could then fuel on even even further demand and and put some upward pressure on on the price. It there’s there’s an very much a chance of that because as people buy platinum jewelry, they see it rising in price. They will talk about their friends, the good investment they’ve made. Look, my my jewelry is actually because they really look it as a as an investment and not necessarily u beauty is one part but investment is a very important part of it. Um and if that’s then attracts investors in bars saying hey this is metal is going places they they will buy more platinum put more pressure on the platinum market. So it there’s easy spiky prices of $1,800 $1,900 possible. Um the opposite is true as well. If consumer confidence would fade, gold would come off and people would run back to gold. Um could it be that these bars come back get traded in? They’re taking profits. Could people go back and say, “Okay, here’s my platinum jewelry back. Give me my money. Then I actually will cash in.” Um so it’s uh it’s it’s very dependent on what happens there. Interesting. Okay. Um, and and when will we get the data from from the from the Chinese consumer market as to whether or not they’ve they’ve bidden on the platinum jewelry? It will be essentially in the next few months. October is there golden week which uh which is a big holiday season. It’s also the the marriage season. So there’s a lot of stocking up now ahead of that. Um the question will be will you see the sales in August, September, October? Um so if that fades and after that it probably will see metal returning to um the wholesalers and eventually get put back into the system. Um so yeah up till October is the big question mark. Will those sales hold up? Interesting. Okay. Really appreciate your time. Thank you. Thanks Peter.