A U.S. Geological Survey scientific investigations report forecasts that South Africa, Russia, Canada, and Zimbabwe will continue to be the principal sources of PGM for at least the next decade.
Global platinum mining capacity is expected to increase by 24,000 kg in South Africa, 9,000 kg in Russia, 3,000 kg in Russia and 2,000 kg in Zimbabwe from 2011 to 2015, according to the report authored by David R. Wilburn.
Palladium capacity worldwide is 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,” said Wilburn.
“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,” he observed.
Of the 52 sites or regional operations reviewed for the USGS analysis, 16 sites were producing PGMs before 1995, 28 sites commenced production from 1995 through 2010, and eight sites were expected to begin production from 2011 to 2015 if development plans come to fruition.
In his analysis, Wilburn noted feed sources of PGM are changing in South Africa and Russia which combined accounted for 89% of platinum production and 82% of palladium output in 2009.
The Geological Survey estimates that global production capacity for platinum is expected to increase by 16% to 310,000 kg/yr. between 2010 and 2016. Global production capacity for palladium is expected to increase by about 14% to 277,000 kg/yr. during the same period.
“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 capacity,” said the USGS. “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.”
The USGS estimated that about 13% of the global platinum production and 42% of global palladium production came from Russian in 2010.
“Although deposits containing PGMs are widespread, those mined for PGMs because the PGMs are economically recoverable at 2010 prices are limited,” the U.S. Geological Survey suggested.
Meanwhile, recycled PGMs from catalytic converters, electrical components, and jewelry has increased so that recycled PGMs accounted for about 30% of worldwide platinum supply and about 29% of global palladium supply in 2010, according to the report.
In 2010, the United States imported about 94% of the platinum and 58% of the palladium consumed. Virtually all the PGM in the United States comes from the Stillwater Complex in Montana.
However, PGMs are also present in the Duluth ultramafic complex in Minnesota, said the report. The most advanced project is the PolyMet Mining’s NorthMet copper-nickel project.
“In 2020, the United States will continue to be highly dependent on PGMs from South Africa, Russia, Canada and Zimbabwe,” the USGS predicted. “The United States, however, may reduce its dependence of foreign primary PGMs if the recycling rate for PGMs increases.”
In his analysis, Wilburn suggested the growth of the fuel cell industry is expected to increase demand for PGMs during the next decade.
“The amounts of mineral exploration and PGM recycling are also likely to increase during the next decade because PGM demand is expected to remain strong and existing sources of primary supply to become more expensive,” he advised.
To read the USGS report, Global Exploration and Production Capacity for Platinum-Group Metals from 1995 Through 2015, go to http://pubs.usgs.gov/sir/2012/5164/