Hydrogen fuel cells represent the next generation technology for vehicles and distributed power that can reduce our nation’s dependence on fossil fuels, especially foreign oil. Hundreds of millions of dollars in private equity have been invested in this technology, hoping to capitalize on a projected $16 billion market (2017) that will grow considerably higher in the longer term.
Even with a reduction in the precious metal content of fuel cells through R&D, platinum is critical to fuel cell performance and will represent 10% to 15% of projected fuel cell production costs. Production of platinum is controlled by fewer than ten companies and over 90% is concentrated in just two areas in South Africa and Russia. According to the US Department of Energy (DOE), an 80% penetration rate of fuel cells in transportation would exceed the expansion capabilities of the platinum industry. Regardless of new fuel cell demand, output disruptions in South Africa and increasing demand from China and other countries could continue to keep platinum prices way above the long-term mean, as they are today.
This begs the question: are we simply shifting reliance from one natural resource (fossil fuels) to another (platinum) and from one set of unstable supplying countries, (Middle East, Russia, Venezuela) to another (South Africa, Russia)?
Addressing this issue presents a CleanTech investment opportunity in the supply chain of hydrogen fuel cells and supporting solar and energy storage technologies. Recent breakthroughs at the Massachusetts Institute of Technology (MIT) indicate that platinum also holds the secret to the production and storage of hydrogen and oxygen (the only two inputs to a fuel cell) directly from man-made solar photosynthesis.
Portuguese Creek Partners LLLP., not only represents an attractive investment opportunity in its own right, but offers an opportunity to help “protect” prior investments in hydrogen and fuel cells, by investing in a domestic supplier of platinum.