Tag: precious metals

Platinum: The Rock Star of Precious Metals

Platinum Grill

Anybody who has shopped for jewelry in the last 15 years or so knows that Platinum is the “go-to” metal for high-end jewelry, especially jewelry involving diamond settings. And yet, even 20 years ago, it was still overshadowed by gold. I know this because about 20 years ago was the first time I shopped for wedding rings. The word “platinum” never came up. 15 years later, when I was once again in the market for a big fat engagement ring, trends in the jewelry world had changed significantly and there was really no question that it “had” to be platinum. Gold had become downright gaudy in comparison.

So what explains the meteoric rise of platinum from a relatively unknown and unused precious metal to its current state as the undisputed ruler of the jewelry kingdom? Platinum is the most rare of all precious metals. Although its first discovered use was for the lining of a sarcophagus around 700 BC in Egypt, a real demand for platinum didn’t occur until about 20 years ago. Since then it has soared to astronomical proportions, with its price tag also rising to staggering heights. Japan actually accounts for nearly half of platinum jewelry sales worldwide, with the US and China battling for 2nd place.

The use of platinum in modern-day jewelry-making didn’t actually gain any real ground until 1900, when none other than the fabled Louis Cartier started working with it. Because it is so much stronger than gold, it has since become the preferred setting for diamonds. However, jewelry only accounts for about 40% of platinum’s uses. 50% of its uses are for industrial purposes. A full 20% of all consumer goods use platinum in their production. Half of the annual production of platinum is actually destroyed by industrial uses. This is the real reason that the price of platinum has soared over the last 2 decades: its price is an index of the rate of industrial progress in developing countries such as China.

Add to that the incredible scarcity of platinum on this planet: annually, only 130 tons (less than 1% of global silver production) are mined, with 80% of all platinum mining, and 88% of all platinum reserves, limited exclusively to the country of South Africa. The cumulative total of all platinum ever mined throughout history could fit inside a cube of less than 25 feet in diameter. Add to that the minor detail that for every ounce of pure platinum, 10 tons of ore are mined – in some cases, nearly a mile under the earth at extraordinarily high temperature – and that it takes 6 months to extract the platinum, and you have a very rare precious metal indeed.

You want my prediction? Platinum is simply too rare to be sustainable for the long haul. Just like in the rock star universe, where “it’s better to burn out than to fade away”, platinum will sink from the jewelry horizon in the next few years, where it will be eclipsed by the much cheaper but just as manageable and strikingly beautiful palladium. What, palladium isn’t ringing any bells for you? By the time you’re shopping for an engagement ring for Wife #3, chances are that it will be.

Now Hiring: Asteroid Miners

A long, long time ago, in a galaxy we are all familiar with, asteroids rained all the gold, cobalt, iron, manganese, nickel,osmium, molybdenum, palladium, rhenuim, rhodium, ruthenium and tungsten that we will ever mine from this planet, onto the earth’s crust.

Based on known earthly reserves and growing rates of consumption in developing countries, it has been speculated that metal reserves essential for modern industry, including antimony, zinc, tin, silver, indium, gold and copper, could be depleted from Earth within the next 50-60 years.

For the above two reasons alone, I am willing to bet that international space exploration is about to take off. Why? Because at the rate we’re going, in a few years, you will no longer be able to look down for metals: you’ll have to look up. Space exploration is going to expand fiercely and rapidly because there is going to be an exceedingly practical reason for it that is far more interesting to most of us than pure science: namely, competition, and huge amounts of potential profits. Soon, we will be going to go back to the source for metal resources – and that will take us into outer space, into a fantastically interesting subject known as asteroid mining.

Near-earth asteroids are considered the most immediate likely candidates for asteroid mining. At 1997 prices, a small metallic asteroid no wider than 1 mile across was calculated to contain more than $20 trillion worth industrial and precious metals– so at today’s prices, it would be even significantly more than that. As another point of comparison, a 1 km-wide asteroid would probably contain more than 2 billion metric tons of iron-nickel ore, which would be more than twice the global annual production of iron ore in 2004. That doesn’t even include whatever precious metals it would also contain.

Apparently, there are three different ways of mining asteroids:

1. Bringing back raw material from the asteroid for processing on earth;

2. Processing the asteroidal materials on-site, thus reducing transportation costs and possibly even producing fuel propellant from the raw materials for the trip home; or (my favorite):

3. Dragging the entire asteroid to a safe orbit around the moon or Earth, so that the majority of its materials can be used and not wasted. It looks like pretty much all you need to know about asteroid retrieval methods, or “catching”, can be found in this handy Wikipedia link: Methods for asteroid retrieval or catching . Although probably a tad on the expensive side, it could be a far more interesting weekend hobby than fishing. At the very least, it brings new meaning to the idea of a pet rock.

What is interesting to note is that, although it is conceded that the cost of asteroid retrieval still outweighs their market value and that at current commodity prices and space transportation costs it is not expected to attract private investment, it doesn’t say anywhere that the technology needed to do this doesn’t exist. In other words, it can be done. And even if you or I can’t afford it right at this moment, it will be done. If you decide to get serious about this, it seems that all you need to know about the subject is available on Wikipedia. And remember, when the headlines about asteroid retrieval start circulating more regularly, you can say you heard about it right here, on the C Marshall Fabrication Machinery website blog, first.

-Anja Wulf