Platinum-group metals (PGMs), including platinum, palladium, rhodium and other metals, are prized for their durability, resistance to corrosion and excellent catalytic properties. These characteristics make PGMs useful in everything from jewelry to electronics.
Today, the automotive industry is the world’s largest consumer of these metals, which are used in catalytic converters for vehicle exhaust systems. Automotive production is expected to climb in coming years, particularly in developing markets, and that is expected to ensure healthy demand for the metals into the future.
But where do platinum and palladium come from? To be sure, the list of the world’s top platinum-producing countries is a short one, as is the list of those putting out strong amounts of palladium.
While the lion’s share of the world’s PGMs are produced in South Africa and Russia, there are a few other countries that chip into platinum and palladium production as well. Here are the five top platinum-producing countries for 2015, according to data from the US Geological Survey.
1. South Africa
Platinum production: 125,000 kilograms
Palladium production: 73,000 kilograms
South Africa is the world’s top platinum-producing country, and holds the largest-known reserves of PGMs globally. With 63 million kilograms of PGMs in reserve, South Africa is equipped to remain a top platinum producer. Currently, the country extracts 78 percent of planet’s platinum, according to the Chamber of Mines of South Africa.
In the third quarter of 2016, total refined supply from South Africa declined 4% to 1,160 koz, due to several safety stoppages, including a fire and a fall-of-ground in three separate occasions, as reported by the World Platinum Investment Council. After two quarters of refined stock sales to cover unexpected mine strikes, producers replenished their inventory by 105 koz. Moody’s Investors Service said that thanks to the new three-year wage deal in place, South Africa’s platinum industry should see some stability in the next year.
Platinum production: 23,000 kilograms
Palladium production: 80,000 kilograms
Despite being the world’s second-biggest platinum producer, Russia’s annual production trails South Africa’s by a large margin. However, Russia is responsible for the majority of the world’s palladium production, and has a significant impact on the global market.
Russia also experienced a drop by 8% year-on-year in the third quarter of 2016. A reorganization of processing facilities and a planned refinery closure resulted in a decline of refined production.
In the first half of 2016, Russia’s Norilsk Nickel, the world’s largest palladium producer, bought about 90,000 troy ounces of palladium after creating the Global Palladium Fund to develop relations with holders of existing metal stockpiles.
Platinum production: 11,000 kilograms
Palladium production: 10,000 kilograms
In 2013, Obert Mpofu, Zimbabwe’s mines minister, introduced new royalty requirements on unrefined PGMs being sent outside the country. These royalties were designed to encourage in-country processing of PGMs.
Zimbabwe continues to pursue the goal of increasing PGMs refining, but remains a difficult operating environment for international organizations looking to benefit from the country’s PGMs reserves. Most recently, Deutsche Welle reported that the government in Zimbabwe is cracking down on foreign companies that have failed to comply with the country’s controversial indigenization law. Companies operating in Zimbabwe are required to “cede at least 51 percent to promote black ownership and correct imbalances from the colonial era,” according to the publication.
Platinum production: 9,000 kilograms
Palladium production: 24,000 kilograms
Canada’s strong palladium production makes it a global player in the PGMs market. The country only holds 310,000 kilograms of known PGMs reserves — less than half the total reserves of other countries on this list — but companies continue to explore for PGMs in Canada in hopes of discovering more deposits. In 2015, Canada upped its palladium production from 20,000 to 24,000 kilograms.
In a research note earlier this year, analysts at INTL FCStone said that the jump in prices during the second half of 2016 suggests that platinum and palladium are starting to look more attractive to investors and as a result they are taking money out of gold to invest in these precious metals.
5. United States
Platinum production: 3,700 kilograms
Palladium production: 12,500 kilograms
Stillwater Mining Company (NYSE:SWC) is the only producer of PGMs in the US. It owns the Stillwater and East Boulder mines. Together, these mines were responsible for almost $532 million worth of metals production in 2015, as per the US Geological Survey. The company also maintains a smelter, refinery and laboratory in Montana and recovers PGMs from spent catalyst material.
Palladium was a big winner after the 2016 US election, with an increased demand for the precious metal. In the last quarter, prices rose due to expectations of economic growth in the US and China as reported by the Wall Street Journal.
This is an updated version of an article originally published on the Investing News Network on March 30, 2016.