Platinum Precious Metal History
Widespread knowledge of the white metal platinum stretches back only a few hundred years, versus thousands for gold. Despite being worked with some skill by South American Indians over 1,000 years ago, not until the Spanish conquest of the New World during the fifteenth and sixteenth centuries did news reach Europe of this new metal. The Spanish first considered it a nuisance because it interfered with their gold mining activities. Platinum’s extraordinary properties did interest European scientists and was noted that it would not “melt by fire or by any of the Spanish arts.” Heavier than gold and virtually impossible to corrode with gases or chemicals, in 1751, platinum was recognized as a newly discovered element.
During the latter eighteenth century, platinum had some industrial uses. It was used to make durable laboratory instruments in Berlin in 1784. In France crucibles for glass production used it, a significant use still today. Platinum also began to impress jewellers and goldsmiths. Leading metal workers, such as Marc Janety, Royal Goldsmith to Louis XVI, and Pierre Chabaneu, of Spain, were using platinum to make expensive cutlery, watch-chains and coat buttons.
Early in the 19th century, new refining techniques increased platinum’s availability. It was soon being used in gun parts, sophisticated batteries and fuel cells, the production of caustic chemicals (the first platinum sulphuric acid boiler weighed over 400 ounces) and the purification of hydrogen.
Platinum from limited availability to money
Increased platinum use was limited by its supply. In 1820, Columbia, still the only major producer of platinum in the world, ceased exporting the metal. Then in 1822, Russian alluvial platinum was proved to be present in the gold fields of the Ural Mountains. The Russian government made platinum into roubles. Over the next 18 years, the Russian government minted almost 500,000 ounces of platinum and, perhaps more importantly, introduced to the world the notion that platinum was like gold, a store of value.
Platinum jewelry remained rare until high-temperature jewelers’ torches were developed. After this, jewellery makers made quick advantage of platinum. As jewelers became more adept at using platinum, it quickly became the diamond setting of choice.
The sources of platinum production remained limited. The demand for platinum is essentially satisfied by the mining activities in just two regions. The Bushveld Complex, which is just north of South Africa’s capital, Pretoria, produce more than two thirds of the annual platinum supply. The Noril’sk-Talnakh region in the extreme north of Siberia in Russia supplies most of the rest. Russia is the only nation with significant stocks of platinum and many believe that these may be running out.
In 1975, after the Arab Oil Embargo sparked increases in precious metals prices, platinum bars that were small enough for the individual investor to buy were introduced in Japan. With platinum’s huge price changes during the late 1970s and early 1980s interest in platinum bullion investing spread to Europe and the United States. Two platinum fabricators, Johnson Matthey & Co. Ltd., and Engelhard Corporation began to produce one and ten ounce platinum bars.
In November of 1983, The Isle of Man, a British Crown Possession, issued a one ounce Noble platinum bullion coin. The highly successful Noble enticed other mints to issue their own platinum coins. During the second half of 1988, Australia (the Koala) and Canada (the Maple Leaf) introduced platinum legal tender bullion coins within three months of each other. Despite the proximity of the launches, both introductions were enormously successful, bringing the level of investment demand to new highs. For nearly ten years, Australia’s Koala and Canada’s Maple Leaf were among the leading platinum coins in annual sales. Not until 1997 was the platinum American Eagle released.
From being the metal that polluted the gold of the Conquistadors to its recognition as being the rarest or even the most precious of the precious metals, platinum’s odyssey has given it the investment performance of a precious metals hedge with the potential of the scarcest of industrial commodities.