Why is Platinum so Expensive?
Platinum may not be popular as gold and silver, but it’s just as special as its precious metal cousins. It’s quite rare. Approximately 1,500 tons of gold are mined annually, but platinum mining only results in 10% of that.
So, why else does platinum hold so much monetary value?
Platinum is a Very Hard Precious Metal
Platinum is more difficult to melt, it’s more challenging to make into jewellery and melting it requires special equipment that many small businesses cannot afford. Using platinum is also relatively new, with most malleability innovations happening in the late 1800s.
Platinum is Required in the Production of Many Products
In today’s age, you need platinum, whether you realize it or not. Your car’s catalytic converter likely has platinum (or palladium). It is also used in scientific equipment, thermometers, dentist, and of course investing.
Platinum is (Practically) Indestructible
Platinum (like gold and silver) is impossible to destroy if you don’t have a nuclear reaction. It can also be melted easier than other precious metals, and converted to other formats, whether they are coins, bars or jewellery.
Platinum is Hard to Find
While gold mines exist in dozens of countries around the world, most of platinum’s sources are in South Africa and Russia. Few significant deposits have been found outside of those two countries, making every step of the production process a challenge.
Platinum Has a Limited Supply
As much as we would like to, we cannot make more platinum. The supply here on earth is all we have unless a meteor filled with platinum suddenly makes a surprise visit. Having a small supply of platinum will keep platinum expensive.
Production is Challenging
Platinum production is as difficult as it gets. Most refiners did not have the capacity in their furnaces to get the temperatures hot enough to melt platinum into anything of use. Finding more deposits of the incredibly rare platinum is also expensive and time-consuming. From start to finish, the process is complex, costly and requires massive resources.
Platinum is Expensive Because We Want It and Need It
Ultimately, platinum is set at the price it is because we love platinum jewellery, we need it in our technological equipment and we want to invest in it. If these three desires were not there, the price would undoubtedly plummet.