South Africa hopes West's economic recovery will have platinum lining
Bruce Hawkins is a mild-mannered civil servant with wide-ranging interests. He wonders about things like whether the Japanese will score a breakthrough in the development of fuel cells, or whether Western Europe will clamp down on car exhaust pollution.
There is a purpose to Mr. Hawkins' curiosity. He monitors developments in the shadowy world of platinum, and possible future uses of the metal, for the South African Department of Mineral and Energy Affairs.
And to the extent that he can discern the future of the silvery metal, he might just catch a glimpse of the future of this country's white-minority government. He might also foresee the role of the West in South Africa as the white-black struggle for power here escalates.
The reason: Platinum is one of a handful of so-called strategic minerals that are rare in the world, needed by the West, and reliably produced in South Africa. Pretoria regards its mineral wealth as a tool for survival. It forces the West to deal with South Africa, and thus lend the government some support, despite Western opposition to apartheid.
Now minerals experts here see an economic recovery in the West that will at least reaffirm, and possibly strengthen, the West's reliance on South African strategic minerals. The longer-term picture is less clear.
These minerals include chromium, manganese, and vanadium. But South Africa's position is probably the strongest in the platinum-group metals.
''When the world market is good, we provide more platinum. When it is bad we provide less,'' Hawkins says. His point is simple but profound. There are only two major platinum producers in the world: the Soviet Union and South Africa (in that order). And South Africa alone is in a position to turn the tap on and off to meet the West's fluctuating appetite for platinum-group metals.
This is because South Africa's ore deposits yield platinum-group metals as primary products, while Soviet production is a byproduct of nickel and copper output and so is not geared to responding solely to platinum demand.
The value the world places on platinum is high. It fetches a price higher than gold.
Platinum and five other platinum-group metals have important military and industrial applications because of their basic strength under high temperatures. Some of them also resist corrosion and catalyze chemical reactions.
Platinum is used for electrical contacts on missiles. The catalytic converters on American automobiles use platinum to clean exhaust emissions. Platinum is used to refine petroleum, as well as to make glass and synthetic fibers. And the Japanese have been eager buyers of platinum jewelry.
South Africa publishes no official data about platinum or any of its strategic minerals. But reliable estimates are that it provided the Western world with 70 percent of its platinum requirements last year. And that was a ''bad'' year for South Africa. It had 75 percent of the market in 1978. (Most of Soviet production is used internally or in the East bloc.)
Another way to look at the relationship is from the point of view of the Western users. The United States, for instance, imports 85 percent of its platinum-group metals. And the alternative to getting these vital metals from South Africa is to rely more on the Soviet Union.
One development that could reduce US reliance on imported platinum is the development of the Stillwater Mineral Complex in Montana. But the project is not expected to be brought to production before the end of the decade. Even then it might provide only one-tenth of US platinum requirements.
The platinum industry has been depressed for two years owing to the general economic downturn in the West. Consequently, major producers in South Africa have cut back production while waiting for the world to eat through a surplus of about 1.5 million ounces of platinum that has accumulated.
Sales of platinum in the West have slumped from almost 3 million ounces in 1979 to some 2.6 million ounces in '82, according to Davis Borkum Hare, a brokerage firm here.
How fast the platinum market may revive is hotly debated. Davis Borkum Hare forecasts ''steadily increasing'' world demand in the short to medium term. But producers may not be able to expand output until 1985. Meanwhile, the surplus of 1.5 million ounces will meet rising demand.
The long-term prospects for platinum-group metals hinge on several factors. Fuel cells being developed by the Japanese could provide an important new use for platinum if they become commercially viable. Another major new market could open up if the use of catalytic converters spreads from the US to Western Europe , which appears possible.
On the minus side for South Africa is the prospect of more recycling of platinum from catalytic converters.