Chris Griffith. Picture: HALDEN KROG/BLOOMBERG
Chris Griffith. Picture: HALDEN KROG/BLOOMBERG

Anglo American Platinum (Amplats) is leading the South African platinum sector’s push for alternative demands for platinum group metals (PGMs), injecting $100m into a new offshore venture to develop and find new technologies.

The $100m from Amplats, which is 78% owned by Anglo American, will be matched with $100m from the South African state pension fund manager, the Public Investment Corporation (PIC), bringing the total investment to about R2.6bn.

Amplats is injecting its portfolio of companies that it has set up or invested in since 2009 into AP Ventures and these assets include Altergy Systems, Food Freshness Technology Holdings, Greyrock Energy, HyET Holdings, Hydrogenius Technologies, Primus Power and United Hydrogen Group.

AP Ventures, an independent fund management business headed by Amplats’ stalwart Andrew Hinkley, will manage two UK-based venture capital funds that will hold the Amplats assets and capital, and hunt for new investments.

"Developing the market for PGMs is a strategic priority for Anglo American Platinum and this investment with AP Ventures is a key initiative," said Amplats CEO Chris Griffith.

"Having enjoyed success and built a strong track record as part of Anglo American Platinum’s PGM investment programme we have taken the decision to separate the fund’s activities into an independent structure that will attract additional outside investment and allow AP Ventures to increase the scale of its activities," he said.

SA is the world’s leading source of PGMs, which have uses ranging across a broad spectrum of industrial uses and jewellery, in the case of platinum.

However, prices of platinum in particular have been stagnant for years while the cost of producing the metal has risen, eroding profit margins and leaving about two-thirds of the country’s platinum mines unprofitable.

SA’s platinum miners have set up and fund the World Platinum Investment Council to spur investment products and awareness of the metal, while they support the Platinum Guild International, which was set up in 1975 to develop jewellery demand.

By creating another set of uses for platinum metals, it will create a new source of demand for the metals and underpin prices and diversify risk away from the overly concentrated use of platinum, palladium and rhodium to make catalytic devices in motor exhausts.

The PIC was investing in AP Ventures to ensure the South African platinum sector had a "sustainable future," said the fund’s CEO Dan Matjila.

"The potential for localisation of these technologies in SA contributes to sustaining jobs in the PGM mining sector and planning for creation of jobs in the manufacturing sectors," he said.

"The PIC is already a significant investor in the platinum mining industry and regards the long-term sustainability of the industry as being critical to long-term returns of its portfolios."