Mineral Monday: What you need to know about platinum and which ASX shares are cashing in on it

Platinum is listed as a critical mineral by the Australian government due to its scarcity and importance vehicle manufacturing and electrical applications.

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Key points

  • Platinum is listed as a critical mineral by the Australian government 
  • ASX shares mining platinum tend to focus on Southern Africa 
  • Total global production of PGEs in 2020 was a mere 380 tonnes 

ASX shares on the hunt for platinum will often be working far from their home base.

While Australia has moderate geological potential for platinum, according to Geoscience Australia, the bulk of platinum group elements (PGEs) are found in South Africa, currently responsible for some 70% of global platinum production.

Russia and Zimbabwe are other historically strong producers.

We'll look at two ASX shares with a focus on platinum below.

But first…

What is platinum?

An attractive silvery metal, you'll often find platinum used in jewellery.

But it's platinum's resistance to heat, corrosion and chemicals that's seen the metal make it onto the Australian government's critical minerals list. Which the government defines as a metallic or non-metallic element that has two characteristics:

  1. It is essential for the functioning of our modern technologies, economies or national security and
  2. There is a risk that its supply chains could be disrupted.

Platinum is critical in vehicle production, used in catalytic converters and electrical contacts. You'll also find it used in things like your laptop screen.

In 2020, Australia produced half a ton of PGEs out of a total global production of 380 tonnes.

So, which ASX shares are on the hunt for the rare element?

Two ASX shares on the hunt for platinum

First up we have small-cap explorer, Orion Minerals Ltd (ASX: ORN), which focuses on both gold and platinum.

On the platinum front, its primary Jacomynspan Project is located in South Africa.

In Australia, Orion also holds mineral rights across various tenements in Victoria's Walhalla Project area, which are prospective for platinum group elements.

The company has a current market cap of $81 million. It hasn't quite been cashing in on platinum yet, however, with shares down 33% over the past 12 months.

On the larger end of the ASX share spectrum, we have Zimplats Holdings Ltd (ASX: ZIM), with a market cap of $2.4 billion.

The Zimbabwe based explorer has a majority stake in the Ngezi mine. Located in the northern part of the nation, Ngezi contains among the largest platinum reserves in Southern Africa.

Over the past 12 months that have seen the All Ordinaries Index (ASX: XAO) fall 10%, the Zimplats share price has gained 6%.

The ASX platinum share also pays a juicy trailing dividend yield of 11%, unfranked.

You can find out which ASX shares are cashing in on cobaltlithium, rare earths, and vanadium in more of our 'Mineral Monday' series.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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