Mining disruptions are having a significant impact on platinum prices, primarily because they tighten the already limited supply of this rare metal. South Africa, which produces about 70% of the world’s platinum, has been experiencing labor disputes and operational challenges in its mines. These issues have led to reduced production levels and even some mine closures due to safety and regulatory concerns. As a result, global platinum output has fallen sharply, hitting its lowest point since 2020.
This constrained supply is happening at a time when demand for platinum is rising across multiple sectors. The automotive industry still relies heavily on platinum for catalytic converters in diesel engines despite the gradual shift toward electric vehicles. Additionally, demand from the jewelry sector is growing strongly, especially in markets like China where economic growth boosts consumer spending on luxury goods. Industrial uses of platinum—in electronics, glass manufacturing, and chemical production—are also expanding.
The combination of shrinking mine output and increasing demand has created persistent deficits in the market for three years running. These deficits are so large that they threaten to deplete above-ground inventories within just a few years if new sources or recycling efforts do not increase substantially.
Because supply cannot keep pace with demand under these conditions—and with no major new mines coming online—the price of platinum has surged dramatically recently by around 20%. This price rally reflects investors’ anticipation that shortages will continue or worsen unless mining disruptions ease or alternative supplies emerge.
In essence, mining disruptions act as a bottleneck restricting how much new platinum enters the market while consumption continues to climb steadily across industries. This imbalance pushes prices higher as buyers compete for limited metal availability amid fears that inventories will run dry soon if current trends persist.