Share tips: Platinum miner to profit from greener fuels

Platinum will be in greater demand as stricter environmental standards call for greener vehicles and machinery. That means this mining stock is set to benefit, says Paul Hill.

James Dinnison, a 25-year-old college dropout, earns £125,000 a year working as a miner in Australia that's three times higher than the national average. However, rising unemployment and cooling commodity consumption by China will eventually bring these super-charged salaries down to earth. That's just as well for the likes of Lonmin, the world's third-largest platinum producer. It operates exclusively in South Africa and was recently forced to stomach an inflation-busting 8% wage settlement after an illegal strike stopped production at its Karee operation.

Going forward, the City is expecting more of the same. Yet I suspect in reality wages will be tempered, as the international labour market slows. Platinum is a precious metal used in jewellery and in catalytic converters for diesel engines. Here growth is being driven by stricter environmental standards and a shift towards more fuel-efficient cars. Emissions targets are broadening too, with the next wave of legislation set to be introduced for trucks, trains and off-road vehicles such as tractors, agricultural and construction equipment.

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Paul gained a degree in electrical engineering and went on to qualify as a chartered management accountant. He has extensive corporate finance and investment experience and is a member of the Securities Institute.

Over the past 16 years Paul has held top-level financial management and M&A roles for blue-chip companies such as O2, GKN and Unilever. He is now director of his own capital investment and consultancy firm, PMH Capital Limited.

Paul is an expert at analysing companies in new, fast-growing markets, and is an extremely shrewd stock-picker.