Abstract

Platinum-group metals (PGMs) are required in a variety of commercial, industrial, and military applications for many existing and emerging technologies, yet the United States is highly dependent on foreign sources of PGMs. Information on global exploration for PGMs since 1995 has been used in this study as a basis for identifying locations where the industry has determined that exploration has provided data sufficient to warrant development of a new mine or expansion of an existing operation or where a significant increase in capacity for PGMs is anticipated by 2015. Discussions include an overview of the industry and the selected sites, factors affecting mineral supply, and circumstances leading to the development of mineral properties with the potential to affect mineral supply. Of the 52 sites or regional operations that were considered in this analysis, 16 sites were producing before 1995, 28 sites commenced production from 1995 through 2010, and 8 sites were expected to begin production from 2011 through 2015 if development plans came to fruition.

The United States imports PGMs primarily from Canada, Russia, South Africa, and Zimbabwe to meet increasing demand for these materials in a variety of specialized and high-tech applications. Feed sources of PGMs are changing in South Africa and Russia, which together accounted for about 89 percent of platinum production and 82 percent of palladium production in 2009. A greater amount of South African PGM capacity is likely to come from deeper, higher cost Upper Group Reef seam 2 deposits and deposits in the Eastern Bushveld area. Future Russian PGM capacity is likely to come from ore zones with generally lower PGM content and different platinum-to-palladium ratios than the nickel-rich ore that dominated PGM supply in the 1990s. Because PGM supply from Canada and Russia is derived as a byproduct of copper and nickel mining, the PGM supply from these countries is influenced by economic, environmental, political, and technological factors affecting exploration for and development of copper and nickel, as well as factors affecting the PGM industry. The recovery of PGMs from mill tailings since 2004 and the recycling of PGMs from catalytic converters, electrical components, and jewelry has increased since 1995 so that recycled PGMs recovered from these products accounted for about 30 percent of the supply of platinum worldwide and 29 percent of the supply of palladium worldwide in 2010.

Economic and geopolitical conditions have influenced PGM supply and demand. The global recession of 2008 and 2009 temporarily decreased demand for PGMs and constrained PGM mine exploration and development, at least through 2010. Legislation regulating the structure of the mining sector has affected mining in Russia, South Africa, and Zimbabwe. Stricter vehicle emissions standards in established markets since the 1980s have led to mandatory use of pollution control devices, such as catalytic converters, that contain PGMs and are required on vehicles in expanding markets, such as China and India.

It is expected that South Africa, Russia, Canada, and Zimbabwe will continue to be the principal sources of PGM at least for the next decade. Based on this review of the PGM industry, the world’s platinum capacity, expressed in terms of recoverable platinum metal, increased from 1995 through 2010 by 77,000 kilograms (kg) in South Africa, 9,000 kg in Zimbabwe, 6,000 kg in Russia, 2,000 kg in Botswana, and 2,000 kg in Canada. For the same period, palladium capacity worldwide increased by 44,000 kg in South Africa, 22,000 kg in Russia, 8,000 kg in Canada, 8,000 kg in the United States, 7,000 kg in Zimbabwe, and 3,000 kg in Botswana. Platinum capacity worldwide is expected to further increase by 24,000 kg in South Africa, 9,000 kg in Russia, 3,000 kg in Canada, and 2,000 kg in Zimbabwe from 2011 through 2015. Palladium capacity worldwide is likewise expected to increase an additional 16,000 kg in Russia, 14,000 kg in South Africa, 4,000 kg in Zimbabwe, and 1,000 kg in Canada if new or expanded mine and associated processing capacity comes into production as planned. It is likely that the magnitude of these changes in PGM capacity has been influenced by such factors as the global economy, electrical capacity shortages and mine safety concerns in South Africa, and geopolitical conditions in the major PGM producing countries.

Revised December 14, 2012

First posted November 26, 2012