Mining disruptions are having a significant impact on the platinum market, creating a tight supply situation that is pushing prices higher. Platinum production, especially in South Africa—which accounts for about 70% of global supply—is facing ongoing challenges. These disruptions have led to a sharp decline in mine output; for example, global platinum production fell by 13% in the first quarter of 2025 compared to previous years, reaching its lowest level since 2020.
This drop in supply is part of a broader trend where the platinum market has been running deficits for three consecutive years. In 2025 alone, the shortfall is expected to be close to one million ounces, which represents roughly 12% of total demand worldwide. Such persistent deficits threaten to drain existing above-ground inventories within just a few years if new sources or recycling efforts do not increase substantially.
The reasons behind these mining disruptions include geological and operational difficulties. Mines are getting deeper—averaging around 1,800 meters underground—and ore grades have declined significantly over time. This makes extraction more complex and costly as miners must deal with extreme conditions and advanced cooling systems underground.
At the same time, there are no major new platinum mines coming online soon enough to offset these declines; projects that could add supply often face long lead times due to permitting and construction phases stretching several years into the future.
On the demand side, interest in platinum remains strong across various sectors such as automotive (for catalytic converters), jewelry—especially growing demand from China—and industrial uses including emerging hydrogen technologies. Even investment demand has picked up amid slower adoption of electric vehicles compared with earlier expectations.
All these factors combined mean that constrained mine supply due to disruptions is tightening an already fragile balance between how much platinum is produced versus how much is needed globally. This imbalance creates upward pressure on prices as buyers compete for limited metal availability.
In essence, mining disruptions are squeezing platinum’s availability at a time when multiple industries want more of it than ever before. Without significant improvements in mining output or alternative sources like recycling ramping up quickly enough, this situation looks set to continue driving price gains and keeping markets tight well into the near future.