Is Anglo Platinum at Risk due to Technological Changes and/or Lower World Economic Growth?
The greatest risk to Anglo and the PGM industry over the long term is substitution in the auto catalyst market for PGM metals. Both Mazda and Nissan have reported breakthroughs in experimental catalytic converter technology, which could lead to 70-90% lower platinum use per converter, utilizing nanotechnology (see here for details). RBC Capital Markets has stated that the technology is potentially commercial in 3-5 years from mid to late 2007, but cannot quantify the potential impact of the technological change. As such, development of this new technology remains a risk for Anglo investors to watch closely in future years. Related, the demand for PGM metals is dependent on economic growth, particularly economic growth in China and India. Much of the additional demand for industrial usage of PGMs and jewelry usage comes from Asian countries. If there is an economic slowdown in China and India, then demand for PGM metals will drop and Anglo’s profitability will be negatively affected. Th
