Issue link: http://resourceworld.uberflip.com/i/1078872
F E B R U A R Y / M A R C H 2 0 1 9 www.resourceworld.com 37 MINING P alladium is emerging as the "most precious" of precious metals as the price continues to soar to new heights hitting a record of over US $1300/oz in January 2019 overtaking the price of gold for the first time in history. Palladium is one of the platinum group metals or PGMs as they are commonly referred to, the others being platinum, rho - dium, ruthenium, iridium and osmium. A chemical element with symbol Pd and atomic number 46, Palladium is a rare and lus- trous silvery-white metal discovered in 1803 by William Hyde Wollaston who named it after the asteroid Pallas. The metal is primarily used as a thin coating applied on ceramic filters inside of catalytic converters in automobile gasoline engines where it acts as a catalyst to convert pollutants carbon monoxide to carbon dioxide and hydrocarbons and oxides of nitrogen into pure oxygen, nitrogen and water. However, palladium doesn't work in diesel applications and so the automotive industry's move away from diesel to gasoline engines, following the VW emissions scandal in 2015, has fuelled a rise in its demand. Historically, platinum, used as a catalyst for diesel-powered vehicles, has been the more expensive metal, although this changed in the autumn of 2017. There is now speculation that at some point, auto manufacturers might start substituting platinum in place of palladium in gas-powered cars, but so far this has not happened to any meaningful degree due to the cost of carrying out the switchover. Prices are likely to continue to rise as the demand for palla - dium exceeds supply over the next few years. Demand will be driven by the continued growth in automobile sales, especially in Asia, and supplies are constrained as there are very few palladium producing regions worldwide and only a few known economi- cally viable ore bodies. The top palladium producers in the world are Russia and South Africa with around 80 tonnes per year (tpa) each followed by Canada at 19 tpa and the USA at 13 tpa. There are con - cerns around the political issues in South Africa affecting future growth. Palladium is usually mined in polyme- tallic ore bodies, with the metal forming only a portion of total mine revenues and as such mining operations' econom- ics are limited in their exposure to the rise in palladium price. For example, to the world's largest palladium producer, Russian miner Norilsk Nickel, palladium represents only 36% of total metal sales revenue. South Africa, the worlds' second largest producer of palladium is also a large producer of platinum, for which prices have been weak and as a result some platinum group metals mines in South Africa are scheduled for closure. As platinum forms a larger share of these operations' revenue, the fall in platinum price has miti - gated the benefit of rising palladium revenues. Some countries have implemented strategies to discontinue long term production of combustion engines in favour of elec- tric vehicles (EVs). The growth of these could pose a risk to the palladium sector since EVs do not require catalytic converters, although palladium is used in fuel cell technology and the rise of hybrid-electric vehicles could drive palladium demand, since they do require palladium to control pollution. Norilsk Nickel forecast recently that combined palladium use in hybrid vehicles in 2019 will be nearly triple that of 2016. n Palladium shining brighter by Ron Hall