Have you ever had the rare opportunity to see platinum up close? It is indeed a privilege because this precious metal is not so easy to come by. Only about 190 tons are mined yearly with most of them coming from South Africa and Russia. South Africa contributes more to platinum mining than any other country in the world. Let’s find out, Why Is Platinum So Expensive?
When not observed closely and without prior knowledge of what it looks like, platinum in its raw form can be mistaken for some random object. What then is special about platinum that makes it so expensive?
Metals are termed precious when they possess the following qualities:
- Weight
- Density
- Chemical activity
- Rarity
- Ductility and Malleability
Platinum is so expensive because it possesses all these qualities better than other precious metals like gold and silver. Rarity serves as a topping and is the biggest reason why platinum is so expensive. Several factors contribute to why platinum is very scarce.
Platinum is mainly found in underground spaces, unlike gold which is often deposited in streams, and silver found in volcanic rocks. With platinum scarcely deposited, a large amount of the earth’s surface has to be drilled before one comes in contact with it, either as dust particles or platinum bars. Being difficult to discover only fosters scarcity as there is only a limited number available. According to International Precious Metal, there are only 200 million ounces of platinum; meaning all of the world’s platinum can fit into an average American living room. Intriguing, right? It is, therefore, a no-brainer why it is so expensive. Scarcity brings value; a well-known demand and supply law stipulates that when demand for a material outweighs its supply, the material only garners more value.
Platinum is not only difficult to find, but it is also harder to work with. Its weight and density take all the glory for this. Platinum requires 5 times more effort in refining for further production and also as a finished material. Take jewelry making as an example. When working with only platinum to make jewelry, the amount of platinum needed to make a platinum ring for example is always about 3-5 times bigger than when using other precious metals. The more platinum used in crafting jewelry, the more expensive jewelry becomes.
Multipurpose Indeed
Rarity is what makes platinum the second most expensive precious metal in the world after rhodium, but rarity is not the only reason why platinum is so expensive. Its multipurpose function is another factor that ranks it high above precious metals like gold. This has led to a surge in demand, outweighing the supply.
Most people only associate platinum with jewelry making, but it is not among the league of valuables with only an aesthetic value. Jewelry making constitutes more than 30 percent of platinum mining which is the second-highest market of platinum users, amazingly. The usefulness of this natural beauty can never be overemphasized. They include the following:
Industry and Automobile
Generally, platinum plays a major role in industries but the auto industry is the current biggest market for platinum mining in the world. It is an integral part of producing emission control devices called “auto catalysts” in cars. In this industry, the auto catalyst is used to suppress poisonous gasses and convert them to safe, non-toxic substances. Other industrial benefits of platinum include but are not limited to the production of nitric acid for fertilizers, benzene, silicone, plastics, polyester, and cosmetics.
Jewelry
Platinum’s silver-white color makes it a perfect fit for gold and its high resistance makes it a sought-after piece in making jewelry where it is sometimes used as an alloy to wade off corrosion in other precious metals, precious stones, and ornaments or used to create jewelry using only platinum.
Electronic
Platinum can be found in almost all kinds of electronic devices. Yelp! You read right. It is mainly used to coat electrodes (a tiny part of all electronic products that help control electricity flow). They are also active properties in making fiberglass, liquid crystal displays (LCD), flat-panel displays, turbine blades, magnets, spark plugs, and laboratory equipment. They are also key components in the storage capacity of computers.
Medical
What exactly can precious metals do medically you might ask? Apparently, platinum has a lot of medical uses including treating cancer. According to CME Group Inc, platinum has been a huge part of cancer treatment for over 40 years. Cisplatin, a platinum derivative is a go-to drug for cancer treatments in its early stages. In certain chemical forms, platinum is capable of killing harmful living organisms and slowing down the rate at which they multiply. They are also the top metal choice for implantable devices and are used to stabilize broken bones by means of implantation.
FAQ
- Can Platinum Fade?
Platinum is known to have amazing longevity. It does not fade, tarnish nor does it change color for years unending. This makes it easy to maintain. To this effect, platinum is often the choice for people seeking long-lasting, easy-to-maintain precious metals like platinum rings and necklaces.
However, platinum is prone to easy scratching but unlike gold, platinum colors do not go off when scratched. This is because platinum maintains the same color all through the mining and refining processes and even when mixed with alloys and other precious metals.
- Is Platinum a Good Financial Asset?
Despite platinum being recognized as more valuable than gold and silver, the latter precious metals are better financial assets than the former. Amazed? Oh well! The reason is not far-fetched.
Platinum is highly volatile; its prices are highly unstable therefore making it risky for long-term investment. Very few people are willing to develop high blood pressure over an asset and would often regard gold and silver as long-term investments. Platinum is traded by the bold, fearless, and those with vast investment knowledge, often as a short-term investment.
- Do you fancy platinum as an investment?
Vast knowledge of finance and investment in your very foundation to success. Garner materials, watch videos, scout for mentors, and be disciplined enough to follow through with all you learned. Platinum bullions and platinum coins can be bought by banks and other financial and investment vendors.