Overview

Platinum group metals (PGMs) are rare precious metals with unique physical properties that are used in diverse industrial applications and in jewelry. Platinum, palladium and rhodium are the most prominent PGMs. The largest use for PGMs is in the automotive industry for the production of catalysts that reduce harmful automobile emissions.

Palladium

In addition to catalytic converters, palladium is used in jewelry, electronic components for personal computers and cellular telephones, as well as in dental applications and in petroleum and industrial catalysts.

Platinum

The largest use for platinum is catalytic converters, followed by jewelry. Industrial uses for platinum, in addition to automobile and industrial catalysts, include the manufacturing of data storage disks, fiberglass, paints, nitric acid, anti-cancer drugs, fiber optic cables, fertilizers, unleaded and high-octane gasoline and fuel cells.

Rhodium

Rhodium, produced in the Company’s recycling operations and to, a limited extent, as a by-product from mining, also is used in automotive catalytic converters and in jewelry as a plating agent to provide brightness.

The International Platinum Group Metals Association's "25 Prominent and Promising Applications Using Platinum Group Metals."

The Palladium Market

The primary product produced at Stillwater Mining Company’s mines is palladium, which represents over 75 percent of its mined production. Stillwater is the only significant primary palladium producer in the world. Other major mining companies produce palladium as a by-product from mining other metals. Stillwater believes that the market dynamics for palladium are unique in comparison to other precious metals and that these dynamics are a significant driver of the Company’s success. Key points concerning the palladium market include:

  • Mined palladium supply is concentrated and constrained
  • Large Russian government palladium inventory is at or near depletion (provided approximately 25 percent of total palladium supply since 1990)
  • Recycling is increasing but insufficient to offset growing demand
  • World-wide automobile production expected to increase significantly
  • Use of palladium in diesel catalytic converters is increasing

Stillwater Mining Company outlined in detail its view of the palladium market in "The Case for Palladium," first published in conjunction with the 2009 annual report, followed by an update provided in the 2010 annual report. In September of 2012 the Company published "Palladium Fundamentals." This document was prepared in order to dispel misconceptions and clarify the vital role of palladium in automobile catalytic converters.