JOHANNESBURG (miningweekly.com) – Palladium and tin are both entering into periods of constrained supply, attendees of the Junior Mining Indaba – hosted at the Country Club Johannesburg in Auckland Park – were told on Wednesday.
In his presentation, titled ‘We need more palladium’, Ivanplats senior VP Gerick Mouton noted that global chemicals company Johnson Matthey expects the palladium market to end this year in a deficit of about 800 000 oz.
He explained that the Volkswagen “diesel saga” had resulted in the consumer base shifting to gasoline vehicles, which use palladium rather than platinum autocatalysts. “That’s also the reason why platinum went flat,” he pointed out.
Mouton added that the continued aversion to diesel vehicles, combined with China’s implementation of new emissions standards, would result in continued demand for palladium over the medium term.
Moreover, platinum substitution by automakers was “not really happening.”
He commented that, “at this point, [the automakers] don’t see the benefit . . . [and even if they did], substitution typically takes about 36 months. So even if they made the call, you won’t see the difference for three years.”
Mouton said the market deficit, combined with a 400% increase in the palladium price since November 2008 presented significant opportunity for Ivanplats.
Mouton explained that South Africa produces about 26% of the world’s palladium, second only to Russia.
He added that, “there’s no new supply coming . . . if one were to increase supply, you’d have to complete an expansion at one of the existing operating mines”.
However, he noted that there was significant potential for companies to discover more palladium in the northern limb of the Bushveld Complex, which “isn’t well explored.”
Mouton described a 65 km stretch of unexplored area between the northern tip of Anglo American’s Mogalakwena mine and the Waterberg platinum group metals project, which he believes has significant palladium potential.
He added that if Platreef were producing and Mogalakwena expanded, South Africa would overtake Russia to become the biggest palladium supplier.
Meanwhile, Alphamin Resources CEO Boris Kamstra, describing tin as the “glue that holds the tech world together”, said tin consumption was primarily driven by soldering.
He noted that the Massachusetts Institute of Technology, in the US, had conducted a study to determine which metal would be most affected by new technology developments. The study had found that tin was “streets ahead”, outperforming even lithium and cobalt.
Kamstra commented that increased demand, combined with supply “getting long in the tooth”, meant that, in the longer term, there was significant opportunity for tin producers, particularly Alphamin’s Bisie project, which would start producing later this year.
He commented that Bisie was located in a major tin province in the Democratic Republic of the Congo and that it had a grade of about 4.5% tin, which he said was equivalent to 24 g/t gold or 18% copper.
“With tin, 1% is considered stratospheric,” he commented.
Mergence Corporate Solutions mining director Peter Major added that the project’s grade alone would ensure it would be in the lowest cost quartile and would ameliorate the costs associated with potential logistics challenges.