THE BOTTOM LINE
Palladium isn’t just an old bioscope in Springs, you know
The platinum group metal has nearly doubled in price in two years, kicking Sibanye and even Lonmin into life
Platinum producers across the board are enjoying improved revenues. Even the deeply troubled Lonmin, which posted a R1.4bn profit at the end of November – the first it has made in four years.
But it’s not because of the platinum price. The precious metal remains in the doldrums as demand continues to wane. The platinum price remains around lows last seen 10 years ago and this week it dropped to $800 an ounce.
But other platinum group metals (PGMs) have proved a godsend for producers. The PGMs comprise platinum, palladium, rhodium, ruthenium, iridium and osmium. They often occur together in the same mineral deposits.
It is mainly the palladium price that is offering producers a boost. The metal price is at a record high of more than $1,330 an ounce, compared with $750 an ounce two years ago, driven by a supply-demand deficit.
Sibanye-Stillwater is benefiting in particular thanks to the palladium-rich Stillwater mine in the US.
Rhodium, typically seen as a by-product of platinum mining, is also fetching a handsome price of $2,440 a tonne. The ruthenium price, too, is at a 10-year high of $266 an ounce. The iridium price is at levels last seen five years ago. The osmium price has not moved, but it never does.
The rand price of PGMs has also increased to boost revenues.
Market watchers expect the palladium price to correct in 2019 but remain strong, and the platinum price to lift – good news for producers in 2019.