NovX21’s clean technology is arriving at just the right time. Environmental standards set by the European Union call for automobile recyclers to recycle 95% of vehicles by January 2015. NovX21’s technology recovers 97% of the three PGMs in catalytic converters (platinum, palladium and rhodium), as well as the ceramics from which the converters are made. The European Union directive opens up a significant potential market for NovX21. According to Innovative Research and Products (IRAP), a private research firm, the PGM global recycling industry will be worth $9 billion by 2018. The European and American PGM recycling markets are expected to grow by about 7.5% annually.
Global automotive production is also rising, as the chart below shows. By 2017, global production will be close to 100 million vehicles, with most of the growth coming from the Asia Pacific region.
Furthermore, mine production of platinum-group metals (PGMs) is currently facing major challenges. In South Africa, responsible for 80% of global production, a miners’ strike has been ongoing for 16 weeks, with no settlement in sight. Thomson Reuters GMFS holds that this strike, which affects Anglo American Platinum, Implats, and Lonmin, the world’s three largest platinum producers, already represents a foregone production of 800,000 ounces of platinum. Russia, the second largest producer of platinum in the world with 13.6% output, cannot compensate for the South African shortfall as its production has its own natural constraints.
According to a Capital Economics study, the loss of South African output, coupled with resurgent demand, will send the platinum market into a deficit this year. Capital Economics expects platinum prices to pick up in the second half to finish the year at $1,600 per ounce, with further upside potential.
Global Automotive Production by 2017