Precious Metals

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Platinum-group metals are essential to the global economy. These are the top countries for palladium and platinum production.

Platinum-group metals (PGMs) include platinum, palladium, rhodium and other metals, all of which are prized for their durability, resistance to corrosion and excellent catalytic properties.

Today, the automotive industry is the world’s largest consumer of these metals, which among other things are used in catalytic converters for vehicle exhaust systems. A rebound and continued growth in auto production is projected in the coming years, particularly in developing markets, and that is expected to increase demand for PGMs, particularly platinum and palladium.

But where do platinum and palladium come from? The list of the world’s top palladium- and platinum-mining countries is a short one — most PGMs come from South Africa and Russia.

As of early 2022, sweeping sanctions on Russia following its invasion of Ukraine are expected to seriously hamper the nation’s ability to bring PGMs to market. So what other countries are producing platinum and palladium? Below is a list of the five top producers in 2021, as per the latest data from the US Geological Survey.

1. South Africa

Platinum production: 130,000 kilograms

Palladium production: 80,000 kilograms

South Africa is the world’s top platinum-mining country and a major producer of palladium. It holds the largest-known reserves of PGMs globally at 63 million kilograms.

According to the US Geological Survey, production of PGMs in South Africa increased by 13 percent in 2021 compared with the previous year “owing to increased mining in the UG2 orebody of the Bushveld Complex.”

The Bushveld Complex is the largest PGMs resource in the world, and represents approximately 75 percent and 40 percent of annual global production of platinum and palladium, respectively.

2. Russia

Platinum production: 19,000 kilograms

Palladium production: 74,000 kilograms

Despite being the world’s second biggest platinum-mining country, Russia’s annual production trails behind South Africa’s by a large margin, coming in at 19,000 kilograms for 2021. That said, Russia’s palladium production last year was just 6,000 kilograms shy of South Africa’s 2021 production levels.

Russia-focused Norilsk Nickel (MCX:GMKN) is the world’s largest palladium producer, and it recently announced plans to invest US$35 billion into infrastructure upgrades between 2021 and 2030; this will ultimately result in higher metals output. It remains to be seen how stiff sanctions will impact Russia's mining sector.

3. Zimbabwe

Platinum production: 15,000 kilograms

Palladium production: 13,000 kilograms

In 2013, Obert Mpofu, then 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. Since then, the resignation of Robert Mugabe and the appointment of a new president, Emmerson Mnangagwa, has increased government support for the nation’s burgeoning mining industry.

Zimplats (ASX:ZIM,OTC Pink:ZMPLF) is currently the biggest platinum miner in the country. It is 87 percent owned by South Africa’s Impala Platinum Holdings (OTCQX:IMPUY,JSE:IMP).

4. Canada

Platinum production: 6,000 kilograms

Palladium production: 17,000 kilograms

Canada’s strong palladium production makes it a global PGMs player. 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 search of more deposits. In 2021, Canada’s palladium production dropped from 20,000 kilograms to 17,000 kilograms.

Canadian PGMs production takes place mainly in the province of Ontario, but PGMs output also comes out of Quebec and Manitoba. The country has one primary PGMs-producing mine, Lac des Iles in Western Ontario. The remainder of the country's PGMs production is as a by-product of Canada’s primary nickel mines.

5. United States

Platinum production: 4,200 kilograms

Palladium production: 14,000 kilograms

Sibanye-Stillwater’s (NYSE:SBGL) Stillwater Complex in Montana is the only primary producer of PGMs in the US. Acquired by Sibanye-Stillwater in 2017 in a US$2.2 billion deal, the South Africa-based company was able to expand its operations and reduce its dependence on aging mines in South Africa. The company also maintains a smelter, refinery and laboratory in Montana and recovers PGMs from spent catalyst material.

The US Geological Survey states that the completion of an expansion project aimed at increasing production at the mine has been “delayed to 2024 owing to disruptions from the COVID-19 pandemic and operational challenges associated with ventilation and ground conditions.”

FAQs for investing in palladium and platinum

What is platinum?

Platinum is the namesake of the PGMs category and is also a precious metal. Signified by the symbol Pt and atomic number 78 on the periodic table, platinum has a silverish-white hue.

What is platinum used for?

Platinum plays a large role in the auto industry for its ability to reduce emissions. Additionally, platinum is in high demand for jewelry and as an investment metal.

Platinum is also benefiting from growing demand from the hydrogen fuel cell sector. The metal is a key catalyst in the process that converts hydrogen into electricity.

What is palladium metal?

Palladium fits into the precious metals category and is a PGM. It is represented by the symbol Pd and atomic number 46 on the periodic table of elements. Palladium has a silvery-white color and is prized for its rarity.

What is palladium used for?

The automotive sector is the primary end user of palladium. The metal is a key component in the catalytic convertors of internal combustion engine vehicles, where it is used to reduce emissions.

Like platinum, palladium is used in jewelry and valued as an investment. It has other smaller-scale uses, and is consumed in various ways by the medical and dental fields, among others.

Which industries are the main users of palladium?

The automotive industry is the largest end user of palladium by far as the metal is key in manufacturing catalytic converters for vehicle exhaust systems. Palladium is also an important material in the fabrication of jewelry and watches, along with dental fillings and crowns, surgical instruments and even musical instruments.

What is the best way to invest in palladium?

While there is no single best way to investing in palladium, those interested in gaining exposure to this market have a variety of options. Investors who prefer more tangible assets can add physical palladium to their portfolios, including palladium bullion and coins. Palladium exchange-traded funds such as the Sprott Physical Platinum and Palladium Trust (ARCA:SPPP) and the Aberdeen Standard Physical Palladium Shares (ARCA:PALL) offer another route. Palladium-focused stocks are yet another option, with pure-play palladium miners including Sibanye-Stillwater and Impala Platinum Holdings.

Why are metals like gold, platinum and palladium so expensive?

Precious metal gold has long been valued as a form of currency and a store of wealth, lending to its high intrinsic value. Platinum and palladium are 30 times rarer than gold, much harder to mine and in high demand due to their important industrial uses.

Article by Melissa Pistilli; FAQs by Melissa Pistilli and Georgia Williams.

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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.

Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.


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