Platinum industry wants a coin

Johannesburg - The major platinum miners remain keen on introducing a platinum investment coin as a means to boost demand for the metal, despite resistance from the SA Reserve Bank (SARB).

At the Mining Indaba this week, Impala Platinum CEO Nico Muller said during a panel discussion that the members of the World Platinum Investment Council (WPIC) remained “very supportive” of the idea of a platinum investment coin.

However, last year SARB said it wouldn’t give the go-ahead for the SA Mint to produce such a coin as feasibility studies had shown the concept wasn’t viable.

Another impediment was that platinum couldn’t be included in the SARB’s reserves, because it did not qualify as a monetary asset as defined by the International Monetary Fund.

WPIC CEO Paul Wilson said this week: “We are of the view that introducing a platinum Krugerrand could be a fabulous idea. We are spending a lot of time meeting the SA Mint and Rand Refinery and talking to them about the case for a platinum South African coin. It could be called a Krugerrand or a Mandela coin. It’s coming onto their agenda. I would have loved for it to have happened before now.”

Trevor Raymond, WPIC director of research, said that the organization believed that if the SA Mint and Rand Refinery joint venture issued a platinum coin it would be in demand and would grow the global market.

“The WPIC continues to offer to co-fund the project. We jointly funded research with them in 2016,” he added.

WPIC is an organisation that does research into platinum and promotes the metal as an investment. The council was started in 2014 and is supported by six South African platinum mining companies.

“What they did do in 2017, which was the 50th commemoration of the launch of the Krugerrand in 1967, they came out with a limited run of platinum Krugerrands, but they only produced 1 967 of them. They are not bullion coins but proof coins,” Wilson said.

Proof coins are special early samples of a coin issue. A bullion coin is struck from precious metal and kept as a store of value or as an investment.

For a platinum investment coin to be minted, government permission is needed, a business case has to be made for it and a name for the coin has to be decided, Wilson said.

“We think the worldwide market for platinum coins is well above 100 000 ounces a year.”

This compares with estimated annual worldwide platinum demand of 7.8 million ounces.

Wilson said that the organisation would like to have good platinum investment products worldwide.

“Frankly, they aren’t as available as they should be, including coins and bars.”

The council set up a joint venture nine months ago with UK online platform Bullion Vault, to list platinum metal as an investment. This platform’s customers now own 14 000 ounces of platinum.

Another joint venture the council has set up is with the Royal Mint. This led to the introduction of platinum coins in the UK in May last year.

“We are working very hard in China, Japan and India to build those markets,” Wilson said.

“We have opened an office in Shanghai in the past 12 months, because we see huge potential in China.

“We are talking to a big bank – one of the top five banks – about introducing a platinum accumulation plan. People open an account and transfer money into the account and that money will immediately be translated into a platinum holding.

“We have partnered with a US platform called Granite Shares and they have introduced a platinum exchange-traded fund (ETF) into the American market in the last three weeks.”

Wilson said Japan was the most mature market in the world when it came to consuming platinum.

“India is a difficult market. We think the potential there is huge because it is a big gold market.”