Hot prospects in metals production
WITH platinum production having sunk to an 11-year low, you’d expect things not to be very hot right now for a company with the name Hot Platinum, which designs and manufactures energy-efficient induction heating devices and smelters, but owners Irshad Khan and Ali Brey are smiling.
In 2005, Khan and Brey unveiled a revolutionary table-top smelter for small-scale jewellers that could smelt platinum in minutes. But being based in Cape Town put them thousands of kilometres away from the world’s main jewellery centres. Then the 2008 recession hit and sales to jewellers took a dive.
But having since shifted focus to making larger smelters and heating devices for the manufacturing and mining sectors, and with the present mineral resources boom in Africa, they are right where the action is.
"We are finally in the right place," says Khan at the company’s new 900m² Killarney, Cape Town, factory — more than double the capacity of their previous premises. Although their business has long leveraged off South Africa’s easy access to platinum, sales to platinum mines now make up less than a quarter of their total sales. Demand for smelting of nonprecious metals has, however, picked up. In the past year, the two — who also export to India, Denmark, Thailand, the US and Russia — have sold laboratory equipment to mines that produce cobalt, nickel, copper and gold in Zambia, the Democratic Republic of Congo and Zimbabwe.
Brey and Khan say their smelter is ideal for operating in conditions in Africa, because it is automated and is 30% more energy efficient than competitors’ devices. But their move to focus more on the mining industry has not been without its challenges. Initially the two would find customers and work with them to develop a new product, but development would often take two years, with a high cost to the mines.
To make their offering more attractive, the two turned to a new style of working, breaking down their devices into modular type building blocks, like Lego, which could then be put together and adapted according to each client’s need.
"This is really one of the things that has allowed us to differentiate ourselves in the South African market, because people don’t have a lot of money to spend on development," says Khan, who says the technology they have developed can be used in almost any heating solution, not just in refining metals but, for example, by forges and in the automotive sector. They have also developed a technology to make atomised powders from metal, which is a more efficient way to mould metal because there is less wastage.
Their latest development is the production of power systems run by hydrogen fuel cells, which can be used, for example, as uninterrupted power supplies or in forklifts that operate in cold storage rooms where batteries wouldn’t be able to withstand the cold or where diesel would pollute foodstuffs.
With the price of hydrogen fuel cells gradually falling, the two are looking closely at the new power source and are slowly building their expertise in this sector with the hope that, if an uptake comes, they will be ready for it.
The two first spotted a gap in the market for smelters targeting the small-scale platinum market after Khan, an academic who specialises in induction technology, attended a trade fair in Basel, Switzerland, in 2000.
Since then it has been through constant innovation and trying to stay two steps ahead of their competition that he and Brey, who grew up working in his uncle’s butchery and in his grandfather’s supermarket, have forged ahead. A bit of luck has also helped them along.
In 2003, while they were still developing their prototype smelter, the two unexpectedly got the perfect opportunity to put the small machine through its paces when a jeweller walked into a corner shop owned by Khan’s brother and saw a newspaper article on Hot Platinum he had stuck up in his store. The jeweller’s boss had been struggling to find someone who could manufacture certain components and was even considering looking outside the country until he stumbled upon Khan and Brey. When Brey went to meet the boss, the two discovered that the job was actually to manufacture parts of a mace that Parliament had commissioned to commemorate 10 years of democracy.
Working 60 days around the clock and with 2kg of platinum the jeweller had lent them, the two managed to complete the job while pulling off casting components, which at the time was not possible in a machine like that anywhere else in the world.
There was also a bit of luck involved when, in 2005, the two were awarded a R5.6m grant from the government’s then Innovation Fund to help develop their smelter further, as Khan had just been able to get the furnace’s electronics to work in time for their presentation to funding officials — and then only after he borrowed 80g of platinum from a local jeweller.
Since then, they have been able to get further funding to expand their product range from Brimstone Investment Corporation, which retains a share in Hot Platinum. Today, the pair use a fourth-generation version of their first smelter.
A few years ago, a representative from a local mining company’s special metals laboratory visited Brey and Khan, bringing with him samples of palladium, platinum, rhodium and iridium. At that point, rhodium and iridium were elements Khan and Brey had hardly heard of. After smelting the platinum and palladium, the official was already eager to take the furnace, but thought he’d satisfy his curiosity by asking Khan and Brey to see if they could smelt the iridium and rhodium (both platinum group metals) too.
Rhodium smelts at 2,100°C and the mine’s special metals laboratory had been searching for five years for a furnace that could smelt the material, but had yet to find one. So the two turned on their small furnace and gave it a try, but to no avail.
The mine official was not surprised. He told them not to worry because they weren’t the first to have tried and failed. But Khan wasn’t giving up. He told Brey to keep the representative there for 20 minutes while he went up to his lab with two students who were still busy connecting up another furnace. He told the students to get ready because they were now going to test it.
Khan realised this would probably be his only chance to test rhodium, because at $600/oz and with five or six ounces of the metal the man was carrying, he’d probably never see this amount again. So while Brey kept the official busy, Khan and his students quickly reconfigured the furnace.
Sure enough, it worked. The metal smelted, even setting off the fire alarm in the building. Returning downstairs, he said to the official: "Okay, is this what it’s supposed to look like?"
"I don’t know," shot back the mine man. "We’ve never seen rhodium smelted before." Then he stepped up to Khan. "I have to shake your hand, because when you said you were a company in Cape Town that melts rhodium, I thought you were smoking the fynbos on Table Mountain."