Precious Metals

Amplats and PGM to Develop Next-gen Battery Technology

Precious Metals

Anglo American Platinum and Platinum Group Metals have formed Lion Battery, which will develop lithium batteries that use PGMs.

Anglo American Platinum (Amplats) (LSE:AAL,OTC Pink:AGPPF) and Platinum Group Metals (TSX:PTM,NYSEAMERICAN:PLG) have joined forces to launch a joint venture geared at developing next-generation battery technology that uses platinum and palladium.

The plan is for Lion Battery Technologies, the newly formed joint venture, to begin a research program together with Florida International University (FIU).

Researchers at FIU will look at the potential of using platinum-group metals (PGMs) as a catalyst to raise the discharge capacity and cyclability of lithium-air and lithium-sulfur battery chemistries.

Under the agreement with FIU, Lion will retain exclusive rights to any and all intellectual property that is developed. The company will also be responsible for all efforts to commercialize the new technology.

Lion is looking at other opportunities that will complement progress made with the university as well.

According to Amplats and Platinum Group Metals, lithium-air and lithium-sulfur batteries outperform most top of the line lithium-ion batteries because their energy density is considerably higher.

By incorporating PGMs into the design of these batteries, the companies believe they can create a new generation of batteries that is both powerful and lightweight. They see these new batteries benefiting from growing electric vehicle demand, and anticipate that they could stoke demand for PGMs.

“This exciting early-stage technology aligns with our broader strategy to bring new technologies to market that will help us secure future demand for the platinum group metals we mine and pave the way to a more sustainable energy future,” said Benny Oeyen, Amplats’ executive head of market development. 

Similarly, Platinum Group Metals CEO Michael Jones said the work could benefit his company’s Waterberg project, which is a large-scale, bulk-mineable, predominantly palladium asset.

“Developing new applications for platinum group metals is key to ensuring long-term sustainable demand, demand which will be important to the future success of our large-scale Waterberg palladium and platinum mining project in South Africa,” he said in a press release about the topic.

The company is currently focused on completing a definitive feasibility study for Waterberg. According to an updated resource estimate released in October of last year, the asset’s current measured and indicated resource stands at 26.34 million ounces at a cut off of 2.5 grams per tonne.

As for Amplats, towards the end of last month the company announced that headline earnings for H1 2019 will be at least 80 percent higher year-on-year.

The company stated that the increase, which it expects will total 3.36 billion rand, is a direct result of higher PGMs prices paired with a lower rand.

While the company has yet to release its Q2 production results, Amplats reported Q1 output of 998,900 ounces of PGMs and maintained its production guidance for the year at 4.2 to 4.5 million ounces.

The company is currently the sole owner of the following PGMs assets: Mogalakwena, Amandelbult, Unki and Mototolo.

Several market watchers believe that, although platinum had a relatively flat Q2, it is headed for gains before the end of this year.

“Total mining supply in 2019 will be 4 percent higher than in 2018, but this is a one off release from stock. Total mining supply in 2020 is expected to be similar to 2018 levels. Demand in 2019 is forecast to be up 8 percent on 2018 as investment demand offsets weaker automotive and jewelry demand,” Trevor Raymond of the World Platinum Investment Council told the Investing News Network.

Analysts polled by FocusEconomics believe platinum will climb to an average price of US$844 per ounce in Q4 2019 before rising further to reach an expected average of US$955 in Q4 of next year.

As of 10:37 a.m. EDT on Wednesday (July 17), Amplats was trading at GBX 2,203.50 and Platinum Group Metals was trading at C$1.82.

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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article. 

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