Void left by ban on key metal from Russia can't be filled
South African producers will not be able to make up for a possible reduction in the supply of key commodities from Russia, primarily palladium and other platinum group metals. This was announced on Thursday by South African media firm SABC, citing the director of the largest mining company, Sibanye-Stillwater, Neil Froneman.
“Acceleration of projects to expand production is possible, but a significant increase in production will take months and even years,” Froneman said.
He noted that car manufacturers are now trying to replace palladium, which is used in catalytic converters, which convert as much as 90% of the harmful gases in automobile exhaust, with platinum.
Russia and South Africa are the world's largest palladium producers, with a combined market share of 80%, or 5.4 million troy ounces. Russian company Norilsk Nickel produces up to 38% of the world's palladium as a byproduct of nickel mining.
Palladium prices have skyrocketed 80% this year to all-time highs, as financial sanctions on Russia, which produces 25-30% of global supply, disrupted shipments and worsened a supply shortage.
The Russian government announced on Wednesday it was banning the export of certain commodities and raw materials. The measure was aimed at ensuring Russia's security amid Ukraine-related sanctions, Moscow explained.
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