Anglo American announces plans to spin out its internal venture capital unit

18th May 2018

Anglo American plans to spin out its internal venture capital unit to raise funds to invest in hydrogen technologies such as fuel cells, as the world’s biggest producer of platinum seeks to boost demand for the metal.

Chris Griffith, the chief executive of Anglo American’s platinum division, told the Financial Times the spin-out will allow the new company to access outside investors as it looks to take stakes in emerging hydrogen start-ups that could push the adoption of fuel cell cars over battery-powered electric cars. “It’s about growing demand,” Mr Griffith said. “We believe we can do so much more with it with partners alongside us.”

Anglo American’s internal fund has made around $80m of investments over the past six years. Last month it invested in a Dutch hydrogen start-up, High-Yield Energy Technologies, along with oil company Shell. It made its first investment in 2013, with a $4m stake in Canadian fuel cell provider Ballard Power Systems.

Platinum miners are looking to hydrogen fuel cells as the next source of demand for the metal, as diesel cars that use platinum in their catalysts face an uncertain future due to growing concerns about air pollution. Platinum prices are trading close to their lowest levels in 10 years. Autocatalysts have accounted for between 37 per cent to 41 per cent of total platinum demand in the last five years, according to the World Platinum Investment Council. But the market share of diesel cars in Europe is falling following the emissions scandal involving Volkswagen. Gasoline cars also face growing competition from electric cars. The share of diesel cars in Europe is set to fall to 46 per cent this year, from 48 per cent three years ago, according to catalyst maker Johnson Matthey. In contrast hydrogen could power more than 400m cars, 15m to 20m trucks, and 5m buses by mid-century, according to the Hydrogen Council, an industry group of 39 companies, including Anglo American. Fuel cells combine hydrogen with oxygen to create an electric current. Platinum is used as a catalyst, and to lower the operating temperature of the fuel cell. The most popular fuel cell car is the Toyota Mirai. Demand for platinum in fuel cell electric cars could rise to 1m ounces by 2030, Mr Griffith said. Last year, autocatalyst demand for platinum in mostly diesel cars and trucks totalled around 3.3m ounces. That’s likely to be driven by China, which is promoting the use of hydrogen technology in trucks and buses, according to Mr Griffith. “At the moment the big game in town is China,” he said. “They’ve put in place very serious incentives. It’s just phenomenal.”

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