The Investing in African Mining Indaba 2026, currently taking place in Cape Town, has highlighted a critical shift in how the mining and automotive sectors interact. As the global energy transition accelerates, industry experts emphasize that strategic offtake partnerships are no longer just business transactions—they are essential tools for securing the materials required for a sustainable future.
Advertisement
The Evolution of PGM Partnerships
The relationship between miners of platinum-group metals (PGMs) and the automotive industry is not new; it dates back to the 1960s following the USA’s Clean-Air Act. This historical legislation led to the development of platinum-based catalytic converters, underpinned by offtake agreements that financed the expansion of the PGM sector in South Africa.
-
New Technologies: PGMs like iridium are becoming vital for hydrogen fuel cells and proton-exchange membranes.
-
Shifting Markets: With the Chinese automotive sector exporting massive volumes of vehicles, PGM miners are urged to build direct relationships with Chinese OEMs to ensure these new vehicles are properly catalysed.
-
Diverse Collaboration: Partnerships now involve a complex web of refiners, fabricators, hydrogen tech firms, and recycling-focused entities.
ESG: The “Indelible” Core
A major theme of the 2026 Indaba is the role of Environmental, Social, and Governance (ESG) standards in securing supply chains. J.J. Messner de Latour of the Initiative for Responsible Mining Assurance (IRMA) noted that ESG has always underpinned PGM partnerships.
Advertisement
“Resilient supply chains are built on transparency and good governance. A business with a social licence to operate will have continuity of supply.” — J.J. Messner de Latour
Automotive customers are increasingly using offtake agreements—contracts to purchase portions of future production—to guarantee prices and encourage responsible sourcing. Experts recommend viewing these agreements as true partnerships rather than simple “customer-supplier command” relationships.
Supply Constraints and the Hydrogen Economy
The potential launch of a hydrogen-energy economy presents significant supply-chain hurdles. Henk de Hoop, CEO of SFA (Oxford), pointed out the scarcity of iridium:
-
Annual Production: Only approximately 259,000 ounces are produced per year.
-
Pre-existing Commitments: About 80% of current production is already committed to customers through existing offtake agreements.
Because of this scarcity, the structuring of these agreements is crucial for the success of the new-energy economy. David Jollie of Valterra Platinum added that in less liquid markets, offtake agreements provide the “comfort” of access to metal, though he cautioned that customers should maintain a diversity of supply to mitigate risk.
Looking Ahead
Despite the complexities, leaders like Lars Reifschläger of Siemens Energy remain optimistic about the role of African mining. With gigawatt-scale electrolyzer factories coming online, South Africa remains a vital PGM supplier. The consensus from the Indaba is clear: to ensure sustainable technology, the market for the raw materials themselves must be made sustainable through long-term, responsible collaboration.