Obscure precious metal takes center stage for platinum giants

The rise of rhodium, the world’s most expensive precious metal, has made it the No. 1 revenue stream of the biggest platinum miners. 

While the metal is well shy of its March peak, rhodium still accounted for 45% of Anglo American Platinum Ltd.’s first-half revenues. That’s more than platinum and palladium put together. For parent Anglo American Plc, the silvery-white metal generated more revenue than the diamonds mined by its De Beers business or the copper it extracts in Chile and Peru.

The scarcity of rhodium — a byproduct of platinum and palladium mining — and its unparalleled ability to curb nitrogen oxides from car exhaust fumes pushed up prices as stricter pollution laws boost demand. In March, it climbed to a record $29,800 an ounce, making it 17 times more valuable than gold.

Originally used for decoration or as corrosion-resistant coating, rhodium has also become the biggest export for South Africa, which produces more than 80% of global supply.

“Rhodium prices have retreated somewhat but continue to contribute significantly to revenues particularly for rhodium-rich mines,” said Mandi Dungwa, a mining analyst at Kagiso Asset Management Ltd. in Cape Town.

With rhodium declining more than 40% from its peak, that contribution may not be repeated. Impala Platinum Ltd. Chief Executive Officer Nico Muller expects market tightness to keep the metal above $15,000 an ounce for the next year, but Neal Froneman, his counterpart at Sibanye Stillwater Ltd., expects prices to fall to a more “sustainable level” of about $10,000 over the next two years.

(By Felix Njini, with assistance from Yuliya Fedorinova and Thomas Biesheuvel)