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South Africa: The Platinum Experience
by Bruce Pucciarello

If I am counting correctly, this is the 14th trade magazine article that I have written. It has been the most difficult one to start and the most difficult to finish. In past articles I have reflected my passion for jewelry and my insatiable hunger to communicate with my peers in an effort to make what we do better and stronger. The times that I have written of my personal experiences, it was usually tongue-in-cheek, poking a little fun, and trying to make sure that the reader understood I do not take myself too seriously.
This time is different. I am still sharing a personal experience, but it is an adventure that will remain one of the defining moments in my long journey up through the ranks of the jewelry industry. It truly was a platinum experience.
I devote a lot of time to developing and promoting platinum. In my mind, part of my motivation is a personal quest. My goal is Novell's constant and successful evolution. Making platinum jewelry gives us the opportunity to challenge, grow, and showcase our design and manufacturing abilities. Platinum is the catalyst for many jewelry designers and smart marketers to get away from an environment that minimizes the value of mid-market bridal jewelry sales. With platinum, better retailers present the very best to the consumer. Because platinum challenges us, it makes us a stronger industry.
When explaining how rare platinum is, jewelry insiders often say, "In order to make one ounce of platinum, they have to mine ten tons of ore." That's a powerful statement, and it has more meaning now that I understand what ten tons of ore look like, how difficult it is to get out of the ground, and exactly who "they" in that statement are.
In October of 2006, my wife, Marion, and I joined an amazing group of people on a trip to South Africa. Platinum Guild International and their sponsors invited us to spend a week talking about platinum, marketing, and South Africa. What we learned, and what we saw, will play an important part in how we work together to provide guidance to our industry in the future.
The small group, comprised of American jewelry manufacturers and retailers, was weary from the long journey to Johannesburg (J-berg, if you want to sound like you are an insider). On our first full day in South Africa, we boarded a bus at 5:30am and embarked on a two-hour drive to the Rustenburg Platinum Mine. We turned into the location of Frank 1 and Frank 2, mines owned and operated by Anglo Platinum.
It is important to note that 75 percent of the world's platinum comes from South Africa and Anglo Platinum is the largest platinum mining company in that country. Anglo Platinum mines about 38 percent of the world's supply of platinum. If you give it some thought, this helps to explain Platinum's rarity. Three quarters of the world's platinum is located in one medium-sized country and one company mines half of that supply. Also, Anglo is the largest financer of PGI's effort to promote platinum at a global level.
Next, we all dressed in the official uniform of the miners-batteries clipped onto belts and miner's hard hats in place. We boarded a metal cage elevator for our descent, one-and-a-half miles below the surface. The elevator dropped at about 35 miles per hour into pitch-black darkness. Once we reached the main shaft, we began our trek, starting at a point where large conveyor belts bring the freshly mined ore to the elevators for transport to the surface. As we walked (and we did walk for a long time) we understood the necessity of the uniform and the equipment. I inadvertently banged my head on the ceiling rock, and into the large bolt ends that held rock in place, at least 20 times, every time the miner's hard hat preventing skull damage. The heavy batteries clipped to my belt lit the light on my hard hat, which guided me through the darkness.
We stopped at a safe room; this was a "more secure area" that the miners would report to in case of a collapse. It did not seem so safe when the crew chief told us this room would only provide four hours of oxygen. Then we continued our hike to the end of the main shaft. Along the way, we passed abandoned side shafts-the tunnels that the miners make to remove the PGM (Platinum Group Metals). As mined-out old shafts are closed, new ones spider out, so the length of the main shaft gets longer. The miners locate the richer veins in the walls of the main shaft and chase them into the solid rock, exploding out a little more each day.
As we walked the mine, we met the men that make platinum possible. They are the engineers that decide the routes. They are the drillers who crawl into tight side shafts to drill holes for the charge setters, and the charge setters who go in at the end of the day to fill and wire all of the holes with explosives.
At the end of the main shaft, I had the pleasure of attempting (and I mean attempting) to drill a hole into the wall with one of the water-cooled drilling machines. I quickly learned a lesson about how important every little piece of equipment is. In my haste to experience, I forgot to put gloves on before grabbing the machine. In addition to the mining sludge that gloved my hands, the unpadded gyration and vibration of the drill left my hands sore for the rest of the day. Of course, with New Jersey attitude, I handed the miner back the drill, turned to my group and said something like, "You don't know what it's really like until you get your hands dirty." Then I walked to an isolated corner, wiped my hands as clean as possible on my coveralls, and reconciled myself to the fact that South Africa isn't New Jersey.
Next, some of the group crawled into a side shaft. I got on my hands and knees, and worked my way into an eight-foot-wide opening that was about three-and-a-half feet high. I remember thinking that this was probably the very worst place in the world to discover if I was claustrophobic. About 100 feet in, a few of us had the opportunity to drill another hole, this time with a smaller drilling machine, one that was designed to work in the tight quarters of a side shaft. Gloves in place, I tried to duplicate the actions of the professional miner that handed me the drill. I pushed one way, the drill went the other, and we danced a dance that must have had the miner laughing at lunchtime with his coworkers. I should also mention the eerie feeling as you drill while crouched in an area where the rock ceiling is just inches from your head.
We were in the mine for about four hours when we began our hike back to the elevator. We retraced our steps, revisiting each experience. I didn't realize how far we had come, literally and figuratively. When we came to the surface, we looked at one another realizing that none of us would ever look at platinum the same way again. I think it was John Green of Lux, Bond, and Green who said, "$1,200 an ounce for platinum seems like a very good deal." We all agreed.
Next, we toured the concentrator and smelter operation where the ore is crushed. Then, after lunch at the club, we moved on to the refinery where the PGMs are extracted from the crushed ore. The results are varying quantities of the six platinum metals: ruthenium, rhodium, palladium, osmium, iridium and platinum. It was a rush of knowledge for everyone.
Now that we are all back home in the United States, our group is communicating regularly and scheduling meetings so we can find ways to share better information about platinum within our industry. Presentation is so influential to American perception, so it is critical that the industry creates an alluring message if we are to increase platinum's market segment. Mémoire CEO, Doug McDowell, says, "We are all doing ourselves a 'disservice' by not trying to sell the finest. I think we all came away convinced that the easiest route for us and for our retailers is to trade down and the key here is, perhaps, to sell more." That sounds right on the money to me. If you sell it, they will buy.
This was an encore trip for Stuller Settings president, Chuck Lein, who stated, "I think that the visits to the mines and refineries reinforced the massive amounts of time, money and effort required to yield an ounce of platinum. It seemed that they almost had to move a mountain, in an ecologically friendly manner, to produce a metal that most of us have only seen in bar, sheet, wire, or shot… or as a finished piece of fine jewelry. It also gave a deeper appreciation to the statement I am fond of using: 'You and your diamond deserve platinum!'"
Have we lost site of who we want to be? Doug believes, "We are forgetting that we are in the fine jewelry business-with the emphasis on fine." Judith Conway understands from the perspective of a designer: "As a dedicated platinum and diamond designer, the trip to South Africa only reinforced our decision of many years ago to offer only platinum as our white metal. Our confidence in platinum's enduring properties gives us the assurance of offering a life-long purchase."
Our group attended a platinum forum in South Africa and the topic of .585 or alloyed platinum came up. Lowell Kwiat of Kwiat observes, "The forum had representatives of producers, a variety of manufacturers, and high-end retailers. All were in agreement that the platinum brand should always continue to stand for purity, among its other virtues. We also had a common sense that there were markets that platinum had not yet tapped into. To Kwiat, this represents an exciting challenge for the future."
I think we were all in agreement that .585 is on life support, at best. I'd love to pull the plug. If we make sure to enlighten a wide range of consumers about the virtues of platinum, the difference in market price will be a non-issue.
Space will not allow me to delve into the politics and problems that South Africa and the platinum mining community face, but I think we all left with a feeling of hope after watching various South African cultures come together in an attempt to build a better country by using their natural resources. AIDS is out of control and the mining community is profoundly affected. Estimates are that 26 percent of the platinum mining workforce is HIV/AIDS positive. It isn't uncommon for a mining company to lose 12 percent of the workforce annually to this unforgiving virus. The mining companies are dealing with this problem by sponsoring educational campaigns.
So how does our group feel about platinum now? Judith shares a view for all of us that attended this tour: "I believe we all concur that it is amazing that platinum isn't more expensive given the enormous and complex process involved in extracting it from the depths of Mother Earth." Ben Bridge vice president and merchandise manager, Peter Luplow, gets the last word: "I went away from this experience with an overwhelming appreciation that the jewelry industry can be so fortunate to even tap into this precious commodity; and we are able to afford our customers the awesome pleasure of owning a piece of the earth's treasure. When I realize the people, the mines, the equipment-and having to go to the depths and ends of the earth to find this beautiful metal-I can't look at a piece of platinum jewelry now without my newfound respect for the earth's true treasure that it really is. And I thought it was just a white metal… duh."
So, my opening observation was correct. I have written, read, and rewritten this article repeatedly, but I could not get the feeling-the picture that I have in my mind-on paper. I look back on these two thousand words and realize that I would need to write a book and even then, there would be more to talk about.
A new year, 2007, is upon us. If you pay attention, you will hear someone speak with deep devotion about platinum. You will read an insightful quote about platinum or see an advertisement that leaves no doubt about platinum's elegance and longevity. Just ask the person responsible if they went on that trip to South Africa with Bruce from Novell. I bet they answer yes. You will be hearing from all of us.


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