In order that South African investors can participate in the platinum market, Lakeshore Trading together with a South African refinery have developed a range of platinum medallions.
"As most South African investors don't have instant access to these offshore platinum exchange traded funds (ETFs) and as we wanted South African investors to have access to platinum bullion, we are able to offer platinum medallions in one ounce, two ounces, 100 gram, 5 ounces, 250 and 1 000 grams," said David Levenstein, a precious metals commentator with Lakeshore Trading.
These will be sold at around 10 percent above spot price.
"These are not limited edition medallions that are usually sold at exorbitant premiums, but are pure 99.5 percent pure platinum bullion medallions."
"We simply want to make platinum bullion available to investors in South Africa," explained Levenstein.
Platinum and its related metals such as palladium, iridium, rhodium, osmium and ruthenium is extremely rare because it's only found in very few places around the world.
The metal is found mainly in parts of South Africa, Russia, and to a lesser extent in Zimbabwe, Canada and a few countries in South America.
Around 75 percent of the world's platinum is mined in the Bushveld Igneous Complex, an area the size of Ireland located north of Pretoria around Rustenberg and Brits.
Like other metals, the price of platinum changes along with its supply and demand.
During periods of sustained economic stability and growth, the price of platinum tends to be as much as twice the price of gold, whereas, during periods of economic uncertainty, the price of platinum tends to decrease because of reduced demand, falling below the price of gold, partly due to increased gold prices.
Platinum price peaked near $2 300 (R16 629) per troy ounce in March 2008 driven on production concerns (brought about partly due to power delivery problems to South African mines).
It subsequently fell to $780 per troy ounce in November 2008 and was trading at around $1 700 on Monday afternoon.
Acccording to Levenstein, platinum should be not be ignored.
"Even though I still maintain that silver is the precious metals with the most potential, platinum is one of the precious metals that investors should also include in their precious metals portfolios," he said.
Levenstein explained that there are good demand and supply dynamics in the market, but the automobile industry still remains the most important.
The biggest use for platinum is the auto industry with around 50 percent of newly mined platinum consumed by global vehicle demand.
"Platinum is used in catalytic converters, which is part of a vehicle's exhaust system and is critical in reducing carbon monoxide, nitrous oxide and hydrocarbons in the atmosphere."
"The platinum in the catalytic converter absorbs and converts these deadly emissions into harmless ones. And China, which recently beat the US to be the largest car market, is growing rapidly," said Levenstein.
About 20 percent of the current platinum supply is used in the manufacture of jewellery, and in January this year, two ETF were launched, one for platinum bullion and one for palladium bullion.
And already close to 15 percent of platinum bullion surplus has been picked up by the ETF. - I-Net Bridge