What are PGM - CEBRA

The Platinum Group Metals (PGMs) are six transitional metal elements that are chemically and physically similar. These six PGM comprise : Platinum (Pt), Palladium (Pd), Rhodium (Rh), Iridium (Ir), Ruthenium (Ru), Osmium (Os). Platinum is the most widely known and Pt, Pd and Rh are the three mostly used PGM in industrial applications.

Due to their scarcity and difficulty in production, coupled with the essential role these metals play in “clean air technologies” for the automotive sector, from Automotive Catalytic Converter (ACC) to Membrane Fuel Cell (MFC) technologies, PGM are officially classified by the European Union (EU) as Critical Raw Materials (CRM).

PGM can either be sourced from primary stream production (mining) or secondary stream production (recycling).

South Africa and Russia are responsible for 82% of the primary mining supply. PGM naturally occur in association and are therefore sourced from similar geological environments. Moreover, PGM can only be economically recovered from very particular rock types generated by natural concentration processes responsible for the formation of ore deposits; such processes having mainly been active in South Africa and Russia.

Recycling supply is more evenly distributed from a geographical standpoint as it is directly linked to the use of commercial and passenger vehicles, ubiquitous large-scale consumer products of our modern society.

Mining activity contributes to 72% of the total PGM world supply. Production from recycling, while being of lesser importance for now, is an important contributor at 29% of the total global supply of PGM and is mathematically destined to grow as finite primary resources become depleted.

Regarding primary stream resources, it is estimated that Russian mine ore grades (Norilsk-Talnakh) average 10-11 grams per ton PGM, or about twice the typical grade of ore mined in South Africa.

Concerning secondary stream resources, the bulk of recycled PGM originates from ACC which contain PGM at concentrations up to 1,000 times greater than natural PGM ores, making them a valuable source of raw material. Indeed, most ACC contain recoverable amounts of PGM ranging from 1-2 grams for a small car to 12-15 grams for a big truck.

Primary mining being responsible for the bulk of PGM supply, the supply gap is set to widen in the light of the following factors.

Geological hurdle

  • Current primary supply restricted to very specific regions (Russia and South Africa).
  • Currently known resources increasingly linked to smaller, deeper and/or lower grade new deposits.
  • Currently known deposits facing increased regulations for start-up in populated areas and increased logistical hurdles when located in remote areas with poor infrastructure.
  • Political tensions and increasing difficulty of obtaining the support of the local population.
  • In particular for PGMs: the extreme specificity of the geological environments in which economic PGM mineralization occurs (as opposed to other metals such as Cu or Zn for example).

Growth factors related to mobility

  • Increasing number of vehicles in circulation and reinforcement of anti-pollution standards.
  • Increasing number of hybrid vehicles that consume 10 to 15% more Pd.
  • Fuel cell vehicles requiring the use of a twice the amount of Pt per car.

Growth factors related to the diversification of industrial applications

  • Aircraft Turbines, Cancer Drugs & Treatment, Ceramic Capacitors, Computer Hard Disks, Crucibles, Dental, Electrodes & Other Electronics, Ethylene Absorber, Forensic Staining, Glass, Hydrogen Purification, Implants, Neuromodulation, Nitric Acid & Other Chemical Catalysts, Pacemakers & Defibrillators, Photography, Sensors, Thermocouples, Silicones, Water Treatment.

This situation is further compounded by the fact that we have now entered a phase where both primary and secondary metal streams sectors face significant constraints.

Miners (or primary metal stream operators) face :

  • Declining rates of discovery and quality of reserves as ore grades for new known deposits tend to be lower and associated with accordingly larger volumes of mine tailings.
  • Increased regulatory pressure as new mines to be developed in populated areas face intensifying scrutiny and difficulties in obtaining local population support for mining.
  • Increased logistical hurdles for access to deposits located deeper in the earth’s crust or in remote areas with poor infrastructure.
  • Increased project costs with difficulty to finance projects in a lingering financial crisis and a relatively low metal price environment.

Recyclers (or secondary metal stream operators) face :

  • Increasing commercial competition making it difficult to secure stable metals flows.
  • Manufacturing developments constantly modifying product design and alloy compositions with an overall tendency to reduce the overall cost of the metals employed.
  • Increasing stringency in domestic legislations and changing export regulations.
  • Increased pressure to develop/adopt new technologies rendering economic the valorization of metals having a low recycling rate.

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