Precious Metals

Price of palladium could fall with increased mining

The price of palladium is anticipated to be jarred with Norilsk Mining's announcement that it plans to increase production of the precious metals.The Russian mining and smelting enterprise is the largest producer of palladium in the world.

Background image courtesy of Norilsk Mining Company; palladium bar image courtesy of Bjoern Junker,

Norilsk Nickel Mining's recent announcement that it plans to expand palladium production over the next five years is expected to impact the price of the precious metal.

Palladium, a byproduct of platinum mining, has outperformed silver, gold and platinum for all of 2018, trading at a significant premium to gold and platinum. The price of palladium has climbed more than 50 percent over the past four months.

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The London PM closing spot price of palladium on Dec. 19 was $1,253 while gold settled at $1,256 and platinum at $791.

Norilsk Nickel, in Russia, is the world’s largest producer of palladium and nickel.

Palladium, like platinum, is primarily used as an auto catalyst in emissions control. The precious metals consultancy Metals Focus reports that demand for palladium for auto catalyst use will reach a record high of 8.5 million ounces in 2018.

Palladium is mostly mined along with platinum in South Africa and Russia. Norilsk announced it will be infusing more than $12 billion into the expansion of palladium exploration and production over the next five years.

The only producer of palladium in the United States is Sibanye-Stillwater, a South African-owned mining operation in Montana. Sibanye acquired the previously American-owned Stillwater mining operations in 2017.

Sibanye-Stillwater is projected to yield 468,000 ounces of palladium from the Montana sites.

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