5 Top Platinum- and Palladium-producing Countries

5 Top Platinum- and Palladium-producing Countries

Platinum-group metals (PGMs) are prized for their resistance to corrosion, durability and excellent catalytic properties. These characteristics make PGMs useful in everything from jewelry making to industrial and electronics applications, according to the US Geological Survey (USGS).

Today, the automotive industry is the world's largest consumer of these metals, which are used in catalytic converters for vehicle exhaust systems. Automotive production is expected to climb in coming years, particularly in developing markets, and that is expected to ensure healthy demand for PGMs into the future.

While the lion's share of the world's PGMs are produced in South Africa and Russia, there are a few other countries that chip into platinum and palladium production as well. Here are the top five platinum- and palladium-producing nations for 2014, as per data from the USGS.

1. South Africa

Platinum production: 110,000 kilograms

Palladium production: 60,000 kilograms

South Africa is the world's leader in platinum production and holds the largest-known reserves of PGMs globally. With 63 million kilograms of PGMs in reserve, South Africa is equipped to remain a top PGMs producer, and currently extracts 78 percent of planet's platinum, according to the Chamber of Mines of South Africa.

Last year, a protracted strike cut South African PGMs production by 33,600 kilograms. As a result, the three major platinum producers in the country — Anglo American Platinum (JSE:AMS), Impala Platinum Holdings (JSE:IMP) and Lonmin (LSE:LMI) — lost over $2 billion in revenue, according to The Wall Street Journal.

2. Russia

Platinum production: 25,000 kilograms

Palladium production: 81,000 kilograms

Despite being the world's second-biggest platinum producer, Russia's annual production trails South Africa's by a large margin. However, Russia produces the majority of the world's palladium, and that has a significant impact on the global market.

2014 strikes in South Africa didn't have as dramatic an effect as expected on the platinum price, as companies were able to process existing stocks. However, the political crisis in Ukraine and concerns about economic sanctions against Russia drove the palladium price up last year as buyers feared a supply disruption.

3. Canada

Platinum production: 7,200 kilograms

Palladium production: 17,000 kilograms

Canada's strong palladium production makes it a global player in the PGMs market. The country only holds 310,000 kilograms of known PGMs reserves — less than half the total reserves of other countries on this list — but companies continue to explore for PGMs in Canada in hopes of discovering more deposits.

Demand for palladium is on the rise. Even though palladium is normally used for catalytic converters in gasoline engines, while platinum is used in diesel engines, palladium has started to replace platinum in catalytic converters for those types of vehicles as well.

4. Zimbabwe

Platinum production: 11,000 kilograms

Palladium production: 10,000 kilograms

In 2013, Obert Mpofu, Zimbabwe's mines minister, introduced new royalty requirements on unrefined PGMs being sent outside the country. These royalties were designed to encourage in-country processing of PGMs.

Zimbabwe continues to pursue the goal of increasing PGMs refining, but the operating environment remains difficult for international organizations that hope to benefit from the country's PGM reserves.

5. United States

Platinum production: 3,650 kilograms

Palladium production: 12,200 kilograms

Stillwater Mining Company (NYSE:SWC) is the only producer of PGMs in the US. It owns the Stillwater mine and East Boulder mine. Together, these mines were responsible for almost $495 million worth of metals production in 2014, according to the USGS. The company also maintains a smelter, refinery and laboratory in Montana and recovers PGMs from spent catalyst material.

In the fourth quarter of 2014, Lundin Mining (OTCMKTS:LUNMF) began production at the Eagle mine in Michigan. While the mine primarily produces nickel and copper, it also puts out PGMs as a by-product.

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