Largest Platinum Producer Takes Stake in Fuel Cell Manufacture

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Researched by Industrialinfo.com (Industrial Information Resources Incorporated; Houston, Texas). Anglo American Platinum (Angloplat) has taken a 17.5% stake in Johnson Matthey Fuel Cells' (JMFC) subsidiary of Johnson Matthey (LSE:JMAT) (London, United Kingdom). The two companies have collaborated, under a 1993 agreement, on research and development of fuel cell components and enabling technologies. Anglolplat, the world's leading primary platinum producer, has now agreed to contribute its share of the intellectual property rights (IPR) and know-how which has been developed under that agreement, for a $32 million dollar payment for the 17.5% stake in the new company.

Johnson Matthey Fuel Cells, which manufactures and markets fuel cell components, is a subsidiary of precious metals refiner and platinum research company Johnson Matthey, which has had a relationship with Angloplat that goes back over 70 years. The deal in the new company will improve the fuel cell company's access to future platinum supplies.

For Angloplat the development of fuel cells is a logical extension of the company's strategy of growing the market for platinum group metals. The company sees the platinum industry as being market driven, not resource driven. They have nurtured the market and have spent money to develop demand. Fuel cells will drive the long term demand for platinum and Angloplat's strategic holding in the fuel cell company will provide commercial returns as well as stimulate demand which could grow dramatically in the 2005 to 2010 period. Johnson Matthey sees the Angloplat interest as another step towards the commercialization of the technology.

Market demand, relative to the platinum resource in the ground, is small. Angloplat estimates that South Africa has sufficient resources to supply the market for about 250 years at current rates of production and consumption.

In January 2002, Mitsubishi Corporation (TOKYO:8058) (Tokyo, Japan), Shell Hydrogen LSE:SHL) (London, United Kingdom), and Johnson Matthey created Conduit Venture Limited (London), Europe's first venture capital company focused on the high growth area of fuel cells and related hydrogen technologies, making investments in companies that have established fuel cell and hydrogen technologies and are seeking further capital for commercial sales and development. Mitsubishi has interests in all areas of the emerging hydrogen economy and has its own business development plans in fuel cell related industries including many different applications developments. This range of interests in the technology by the other two companies in Conduit gives the venture strategic congruency. Other investors are being invited to join.

Johnson Matthey has almost completed phase 1 of investment into membrane electrode assemblies (MEA's) at its Swindon UK facility. MEA's are the key component at the heart of a proton exchange membrane fuel cell. Several key customers have made announcements recently concerning plans to commercialize fuel cell products and continuing investment at Swindon is designed to support these customers. Currently JMFC, who customizes MEA's for customers stacks and operating characteristics, is developing materials with the aim of meeting performance and cost targets for residential and vehicle applications. JMFC's range of catalysts (HiSPEC) are designed to give top performance in proton exchange membrane and direct methanol fuel cells, using single and bimetallic supported and unsupported catalysts which have been successful on both anodes and cathodes.

In current market developments, the micro combined heat and power (CHP) fuel cells for the home will generate 3-10 kW of electricity, with waste heat cycled into the loop as home heating or air conditioning. As the power is generated at the point of use, there is no line transmission power loss. The home is tipped as the first mass market for fuel cells with prototypes now in field trials. Large scale commercial systems will follow, probably before 2010.

In the automotive industry, estimates for the number of vehicles powered by fuel cells by 2010 vary from a few hundred thousand to several million vehicles. Even the most conservative estimates agree that fuel cell cars will have superseded the internal combustion engine by 2050. Some automotive industry management has put the date of fuel cell predominance at 2030. The California Fuel Cell Partnership has been set up to advance fuel cell vehicles and plans to place about 70 fuel cell passenger cars and buses on the road in 2003. California's Air Board begins requiring zero emission vehicles in 2003. By 2010, around 22,000 zero emission vehicles (ZEV's) will have to be made available, and that number should rise to 50,000 in 2018.

Distributed generation power systems are also being developed in the 200-250 kW range. These are used for powering industrial plants, hospitals, and standalone applications. The fuel cell technology is also a natural replacement for batteries and small internal combustion engines in portable applications.

Fuel cells generate power by combining hydrogen and oxygen to produce electricity, heat, and water. Fuel cells use an electrochemical process to produce a direct current, without combustion and without moving parts.