Modern Mining February 2025

COMMODITIES OUTLOOK

Sylvania Dump Operations, located in the Bushveld Igneous Complex, South Africa

Stunted PGMs: Miners adapt to stay profitable Innovation, adaptation and new end uses signal a light at the end of the tunnel for PGM producers

P latinum Group Metal (PGM) prices have plummeted in recent times, falling by as much as 84% from their peak in 2021, straining balance sheets and leaving miners and investors with a headache. PGMs consist of six metals with similar properties, the most significant of which are platinum, palladium, and rhodium. They are highly durable and recyclable, possess fantastic catalytic properties, and are corrosion and tarnish resistant. These properties lend themselves to a wide range of industrial uses, including in components of mobile phones, computers and aircraft turbines, and they

Anglo-American Platinum, have significant PGM operations in South Africa, each producing close to, or in excess of, one million ounces a year. Russia is the world’s second most significant producer, accounting for 27% of global supply and 8% of reserves. Russia’s largest mining company, Norilsk Nickel, is also the world’s foremost palladium producer. The average PGM basket price, between the start of July 2023 and the end of June 2024, was 36% lower than the same period in 2022-23, driven primarily by the decline in rhodium and palladium prices, which fell 51% and 38% respectively. However, there is hope amongst

are also used in the glass making process. The main application of PGMs, however, is in catalytic converters, with automotives accounting for over 60% of all demand according to a 2022 survey by the Canadian government. Herein lies the problem for producers; electric vehicles (EVs) do not require catalytic converters and therefore use significantly fewer PGMs. With internal combustion vehicles planned to be slowly phased out and EVs coming to the fore, PGM demand is

producers of a PGM price recovery in the medium to long-term. It has been reported that an embargo from the West on Russian palladium in retaliation to its aggression in Ukraine might be considered, which would undoubtedly help push prices back towards their previous levels. In addition, Sibanye-Stillwater has

PGMs are predominantly produced in South Africa, with the nation accounting for 55% of global production, and a massive 88% of global reserves, according to a Statista survey from 2023.

suggested that prices are reaching an inflection point, and will naturally rise soon, with CEO Neal Froneman stating: “I think we are very close to a turn in the palladium market”. Berenberg has also lifted its price deck to reflect its “upbeat” position on

suffering. However, PGMs are also used in plug-in hybrid vehicles as well as hydrogen powered fuel cell EVs, which could provide a growing source of demand in the future. PGMs are predominantly produced in South Africa, with the nation accounting for 55% of global production, and a massive 88% of global reserves, according to a Statista survey from 2023. Companies such as Impala Platinum, Sibanye-Stillwater, Northam Platinum, and Anglo-American, through its subsidiary

platinum. As mentioned, another potential lifeline for PGMs is the plug-in hybrid market because, unlike fully electric vehicles, hybrids often require significant quantities of platinum and palladium. EV sales have somewhat tapered recently, declining by 11% year-on-year

10  MODERN MINING  www.modernminingmagazine.co.za | February 2025