Platinum is facing significant supply chain challenges that are impacting its availability and price. For several years now, the world has seen a persistent supply deficit in platinum, with shortages expected to continue through 2025 and beyond. This ongoing shortfall is largely due to issues in the primary source of platinum: South Africa, which produces about 80% of the global supply.
One major factor disrupting platinum supply is South Africa’s worsening energy crisis. Since 2020, rolling blackouts imposed by the state power company Eskom have severely affected mining operations. These power outages reduce mining capacity because mines cannot operate at full strength without reliable electricity. As a result, many mines are running at only about 70-80% of their potential output.
In addition to energy problems, South African platinum mining faces other constraints such as aging infrastructure, water access difficulties, and labor relations challenges. These factors combine to slow down production growth despite rising prices that would normally encourage more output.
Another important aspect is that developing new platinum mines or expanding existing ones takes a long time—often five to ten years—due to high capital costs and complex exploration processes. This means even if prices stay high or increase further, new supplies won’t come online quickly enough to ease shortages.
The shortage has led investors and markets to draw down on aboveground inventories—the stockpiles of physical platinum held outside of mines—which have been shrinking rapidly and may run out within two or three years if current trends continue.
Interestingly, recycling rates for platinum have not increased as might be expected during times of high prices; instead they remain below pre-pandemic levels. This reduces an alternative source of metal entering the market when mine production falls short.
All these factors combined mean that supply chain issues—from energy disruptions in South Africa’s mines through long development timelines for new projects—are creating a tight market for platinum globally. The scarcity has pushed prices up sharply this year as demand remains strong from sectors like automotive catalysts (for pollution control), jewelry (especially in Asia), hydrogen fuel cells, chemical processing, and glass manufacturing.
In essence, while demand continues growing steadily across various industries worldwide, persistent bottlenecks on the supply side keep pushing platinum into deficit territory with no quick fix in sight.