PGE Developers Gain Momentum as Demand and Price Surge Create Structural Investment Opportunity

• Platinum and palladium prices surged dramatically in 2025, with platinum nearly doubling in the second half and palladium climbing 105% from $880 to $1,800 per ounce, driven by structural supply-demand imbalances that market forecasts project will persist through 2030.
• Supply constraints prove fundamentally inelastic due to extreme geological concentration, with 90% of global reserves located in South Africa's aging deep-level mines whilst production elsewhere occurs primarily as a mining byproduct.
• Industrial demand strengthens contrary to electric vehicle projections as hybrid vehicles—which consume more platinum and palladium than conventional engines—have become the fastest-growing automotive segment globally, growing at 10-15% annually due to infrastructure limitations and superior manufacturer profit margins.
• Investment demand is maturing across physical, ETF, and equity channels whilst new market infrastructure develops in China, creating potential for significant price impacts given that above-ground inventories have fallen below six months of supply.
• Multiple independent demand vectors across automotive, jewelry substitution driven by gold prices reaching twice platinum's level, and investment sectors are converging simultaneously as a fundamental inflection point for the precious metals complex.

The platinum group elements sector experienced a fundamental revaluation in 2025 as prices responded to years of underinvestment meeting accelerating demand across automotive, jewelry, and investment sectors. Platinum prices nearly doubled in the second half of 2025 whilst palladium surged 105% from approximately $880 per troy ounce to current levels around $1,800 per ounce. These price movements reflect structural supply-demand imbalances rather than transient geopolitical premiums, with market forecasts projecting persistent deficits through 2030 even accounting for all known development projects.

Nick Smart, CEO of ValOre Metals and 21-year veteran of Anglo American, characterizes the current environment as reflecting fundamental changes across the demand landscape:

"If we look at demand for platinum & palladium, perhaps broken into three segments: one being the industrial demand particularly driven by auto catalysts, number two being the jewelry demand, and number three being the investment demand. We see changes in all three of those spaces."

Supply Constraints: Geological Concentration Creates Inelastic Response

Understanding platinum's supply dynamics requires appreciating both geological rarity and economic constraints that differentiate PGEs from other precious metals. Smart explains the fundamental challenge:

"Platinum is not particularly much more rare than gold. Both have an average distribution in the earth's crust in the order of a few parts per billion. But what really puts platinum & palladium apart is the ability to find it in a concentrated deposit."

The practical implications extend beyond geology into operational realities. Smart notes that many platinum deposits tend to be deep level underground mines with very significant investment in terms of infrastructure to get into the ore bodies and right conditions to invest in which conditions have not existed in a number of years. The result has been declining supply from existing South African operations that are getting older, deeper, and more costly to operate.

Nick Smart, CEO of ValOre Metals & Stefan Gleason, CEO of Money Metals Exchange

Extreme geographical concentration compounds these challenges, with 90% of global platinum group element reserves located within South Africa's Bushveld Complex. Stefan Gleason, President and CEO of Money Metals Exchange, emphasizes the supply inelasticity that creates explosive potential:

"Most of platinum, at least outside of South Africa, is a byproduct that is not even a primary metal driving the economics of a mine. Two to 10 times higher prices does not necessarily result in a supply response and especially considering the massive underinvestment and the geopolitical issues.

The cost differential between established operations and new supply sources illustrates the challenge. South African operations employ narrow reef style mining at extreme depths resulting in costs ranging from $900 to $1,800 per ounce, whilst Russian operations achieve approximately $300 per ounce.

Alex Dorsch, CEO of Chalice Mining, notes:

"They're something like a tenth of the abundance of gold in terms of how many deposits there are globally. There's not a lot of supply options. When you see elevated prices, prices can stay high for several years because there's really no ability for an existing supplier to add more metal to the market."

The Hybrid Vehicle Reality

The most significant shift in platinum demand has occurred in the automotive sector, driven by realities that diverged sharply from earlier electric vehicle transition forecasts. The demand implications extend beyond market share to platinum intensity per vehicle. Smart emphasizes:

"So both platinum & palladium have a very significant use in the auto catalyst which sits in the exhaust systems of internal combustion engines and also in hybrids. So hybrids actually use more platinum & palladium than internal combustion engines."

Mike Garbutt, CEO of Clean Air Metals, reinforces this point:

"People would talk about the demise of platinum and palladium because of battery electric vehicles, and that's not entirely the case. The platinum loadings in hybrids and plug-in hybrids is actually quite higher than what you get in the combustion engine."

The perceived electrification of the transport sector has occurred far slower than anticipated, placing platinum and palladium in strong deficit conditions whilst hybrid vehicles grow at 10-15% annually, outpacing battery electric vehicle adoption. The combination of structural supply deficits, diversified demand growth, and acute physical tightness creates conditions for sustained elevated pricing in the PGM complex.

Dorsch emphasizes supply constraints create extended cycles:

"What makes us very excited about the palladium market is just the lack of supply options. There is really no ability for an existing supplier to add more metal to the market."

This inelasticity, combined with multiple demand drivers across automotive, jewelry, investment, and emerging hydrogen applications, supports the investment thesis for development projects in stable jurisdictions.

Interview with Alex Dorsch, MD & CEO of Chalice Mining

Jewelry and Investment Demand: New Vectors Emerge

The jewelry sector presents an accelerating growth vector as gold prices have surged to levels double platinum's current pricing. Gleason observes:

"Gold is twice the price of platinum. People are moving from gold jewelry to platinum jewelry and gold is getting so outpriced. Even at Money Metals, we have a platinum jewelry line, It's a bullion-based platinum jewelry line and it's very popular and again cheaper than gold at less than half the price of gold."

Smart elaborates on the jewelry manufacturer perspective as platinum offers manufacturers cost relief whilst maintaining luxury appeal, particularly for white gold substitution. Growth is particularly notable in Asian markets, with Smart noting a lot of growth in China in terms of demand for platinum jewelry. Most significantly, new investment infrastructure is developing in China. Gleason notes the emerging three-way pull in the platinum market between London facing shortages, the US experiencing inventory builds from tariff concerns.

Garbutt adds: "With global instability and ongoing concerns about inflation, people have ran to platinum as a low-cost store of value as opposed to gold, and it's getting taken up in large quantities in Asia at the moment."

Interview with Mike Garbutt, President & CEO of Clean Air Metals

The Supply-Demand Deficit: Persistent Imbalances Through 2030

Market forecasts indicate structural deficits persisting through the remainder of the decade. Smart explains forward projections:

"The World Platinum Investment Council thinks that the market may be at parity this year in terms of supply versus demand. 2026 may not actually have a deficit this year although they still forecast deficits going out to 2030 in terms of more demand versus supply."

The challenge of closing this gap appears formidable. The importance of geographical diversification beyond South Africa cannot be overstated.

Smart emphasizes, "Developing projects outside of South Africa is a key part of diversifying and strengthening that supply chain of the primary metals. There are only a handful of them that have significant projects in that space."

Bravo Mining received significant regulatory progress with the publication of Presidential Decree No. 12,823, formally creating the Export Processing Zone of Barcarena (ZPE Barcarena) in Pará State, Brazil. The decree represents the final federal act establishing the ZPE, following prior approval by Brazil's National Council of Export Processing Zones. Bravo has been selected as the first mineral project designated as anchor tenant of a Brazilian ZPE.

Chairman and CEO Luís Azevedo stated:

"The signing of the Presidential Decree formally creating the ZPE Barcarena is a significant milestone for Bravo and materially advances regulatory certainty around our development scenario [...] with the 4PGE basket price now approximately 60% higher than the price used in our PEA, this development further reinforces our confidence in the long-term strategic positioning of the Luanga Project."

Bravo emphasizes that the Base Case for Luanga highlighting the project's resilience across scenarios particularly with current PGM prices and supportive market fundamentals. With a C$86,273,000 financing completed, Bravo Mining and its Barcarena ZPE with Atlantic Ocean access provides opportunities for import and re-export of third-party nickel and PGM concentrates within the ZPE framework.

The Investment Thesis for PGE

• Structural deficit of 700,000 ounces annually persists through 2030 against 6 million ounces total platinum production, with above-ground inventories fallen below six months of consumption creating acute vulnerability to demand shifts.
• South African operations face costs of $900-1,800 per ounce compared to $300-370 per ounce for new projects in stable jurisdictions, creating insurmountable economic barriers to supply response.
• Hybrid vehicle growth drives unexpected industrial demand with 75% of US new vehicles remaining internal combustion engines whilst hybrids—using more PGEs than conventional vehicles—represent fastest-growing global automotive segment at 10-15% annual growth as manufacturers prioritize profitability.
• Jewelry substitution accelerates as gold reaches 2x platinum prices with manufacturers and consumers in India and China shifting to platinum for cost relief, whilst emerging Chinese investment infrastructure creates new demand vector.
• Establish 1-2% allocation to PGE exposure after establishing gold/silver base position, combining physical platinum for long-term holding with mining equities outside South Africa in stable jurisdictions (Canada, Australia, Brazil) featuring capital-efficient development pathways and near-term production timelines. Consider staged entry approach given commodity price volatility whilst recognizing 2025's price action validates structural thesis.
• Primary risk is severe deflationary recession impacting industrial demand, though platinum's diversified demand across automotive, jewelry, hydrogen, and investment sectors provides buffering versus palladium's heavier automotive concentration.

TL;DR

Platinum and palladium prices surged in 2025—platinum nearly doubling and palladium climbing 105%—as structural deficits emerged from years of underinvestment meeting accelerating demand across hybrid vehicles (growing 10-15% annually), jewelry substitution (gold now 2x platinum's price), and emerging Chinese investment markets. With 90% of reserves concentrated in South Africa's aging mines producing at $900-1,800/oz costs, above-ground inventories below six months of consumption, and London lease rates reaching 12-15% annualized, supply cannot respond to price signals. Market forecasts project 700,000-ounce annual deficits through 2030 against 6 million ounces total production. Development projects in stable jurisdictions offer substantial leverage to sustained elevated pricing with capital-efficient pathways and strong base case economics for downside protection.

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