Commodity Check: World’s leading Palladium producer resumes full operations – we look at current prices and outlook

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Palladium, among other platinum group metals like platinum, rhodium and lithium have seen substantial growth in demand as the global economy goes greener.

These developments are important, more so from a Zimbabwe perspective as the country’s economy is largely anchored on mining and agricultural activities – another sector when combined under the “commodities” basket looks promising this year as the global economy rebounds from the COVID-19 induced slump.

Back to palladium, Russia’s Norilsk Nickel (Nornickel), the world’s largest palladium producer and a leading nickel producer has resumed ore mining at the second of its two mines hit by flooding in March this year.

The disruptions prompted Nornickel to cut its 2021 production guidance, further propping the prices of palladium up.

Palladium jumped to a record high of US$3,0007.73 per ounce in early May 2021, as demand-driven prices for the metal continue to reverse deficits since 2012.

According to online website Metals Daily, palladium is trading at a high of US$2,782.50 per ounce, as of Thursday 11 am CAT.

This is ahead of gold and platinum giving it the title of most expensive of the major traded precious metals. Platinum is trading at US$1,152.98 per ounce as of Thursday 11 am CAT, while gold which has recently seen a surge in prices on fears of U.S inflation spike and a weaker dollar is trading at US$1,889.33 per ounce.

The outlook for palladium remains rosier even though its prices have retreated lately. The metal used in catalytic converters is expected to outstrip platinum this year and its prices are expected to rebound from current levels while gold prices are expected to close the year in the region of $1,700 an ounce on strengthening US dollar and rising real yields.

Zimbabwe’s Positioning

Palladium is found as the free metal associated with platinum and other platinum group metals as well as with nickel and copper deposits (from which it is recovered commercially).

Zimbabwe, after South Africa, has the world’s second-biggest platinum deposits on the Great Dyke. An estimate of 2.8 billion tones PGM ore at 4g/t 4e is estimated to lounge on the Dyke.

The country’s platinum producers include Zimplats and Mimosa which are owned by Impala Platinum and Unki which is owned by Anglo-American Platinum, all headquartered in South Africa.

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