There was a time just a few hundred years ago, in fact, when platinum was neither an industrial metal, nor a strategic metal, nor a precious metal used for high-end jewelry. In fact, during the 17th century in South America, the Spanish Conquistadors thought the metal was a nuisance because it interfered with their gold mining operations.
What a difference a century or two can make! In the early 1800s, platinum was found in the gold fields of the Ural Mountains in Russia... and the Russian government decided to take that rare element and turn it into a monetary metal by producing platinum roubles. Over the next 18 years, the Russians minted nearly half a million ounces of platinum roubles and transformed the metal from a mere commodity into a precious metal that was and is, like gold, a store of value.
Today, platinum is a widely-used although extremely rare metal, critically important to the auto industry, the jewelry trade, and the chemical, electrical and glass manufacturing industries. Far rarer than gold, it is estimated that all of the platinum ever mined throughout history would fit into a cube less than 25 feet on each side. The vast majority of platinum mined today comes from just two parts of the world: The Bushveld Complex north of Pretoria, South Africa and the Noril'sk-Talnakh region of Siberia in Russia, which produce, respectively, about two-thirds and one-quarter of the world's platinum supply each year.
Platinum's supply/demand fundamentals are tight. In fact, according to some estimates, if platinum mining were to cease today, there would be only about a year's supply available to industry. In contrast, above-ground supplies of gold would last nearly a quarter of a century.
More than 50% of annual platinum production is used in the automotive industry. Platinum is a primary element in auto catalysts that control vehicle exhaust emissions of hydro-carbons, carbon monoxide, oxides of nitrogen and particulates. Auto catalysts convert most of these emissions into less-harmful carbon dioxide, nitrogen and water vapor. If developing countries such as China and India introduce new environmental legislation to combat air pollution, the demand for auto catalysts may increase, and could in turn increase demand for platinum.