200 Dollars per Gram : The Metal that Makes Truffles Seem a Bargain
Imagine that tonight during dinner, you take your family or your friends on a little adventure. For that you won’t have to travel very far – just look underneath your dinner table. And imagine that there’s a big silvery-white cube sitting there, filling up the space. What you might see there is all the rhodium that is produced in one year, a little less than two cubic meters (or not even 70 ft³).
You don’t have to worry, by the way, that the metal might melt away from its hiding place under your table. Rhodium has a melting point of 1,966C (3,571F) and it boils at 3,727C (6,741F) – a little higher than the water usually used for the after-dinner espresso.
Size and heat resistance are one thing; value is another. And here you can really amaze your fellow diners, because the ‘little’ cube would have a market value of $4.6 billion. Of all eight precious metals, rhodium is by far the most expensive – almost ten times as costly as gold and worth five times the price of platinum, the second most expensive precious metal.
That hasn’t always been the case in the 203 years since the metal was officially discovered by the English scientist William Hyde Wollaston, using for his findings platinum ore that he presumably obtained from South America. The origin of the name comes from the Greek word ‘rhodon’, meaning ‘rose’.
Rare – and Never Alone
There are no completely reliable long-term production figures for rhodium available, but approximately 425 tonnes of it have probably been unearthed in the last 200 years: 300 in South Africa, 100 in Russia and the remainder in several other countries, mainly in the Americas and in Zimbabwe.
As in the case of its sister metals, ruthenium and iridium, there are no primary deposits of rhodium in existence. The metal is always contained as a by-product in platinum-bearing ores and can be found also in certain nickel deposits. Global supply has risen 50 percent in the last ten years, mainly as a result of a doubling in South African production. Today the four major South African platinum metals producers account for 85 percent of the global production of nearly 26 tonnes (around 825,000 ounces), while Russia has a market share of around 12 percent. Russian supply has shrunk on average during recent years, mainly due to reduced stock sales, but this development has been more than counterbalanced by the above-mentioned production increase in the South African Bushveld.
Whether that will be enough to counter the so far ever-increasing industrial demand remains to be seen. However, what is already apparent is the importance of the metal for South African mineral exports. At current market prices rhodium exports are valued at about$4.1 billion. That is two-thirds of the total value of the South African gold exports, but who – apart from a small group of insiders – has ever heard of a chemical element called rhodium that is set to challenge the importance of the yellow metal as a major export earner for the Rainbow Nation?
Thanks to South Africa’s mineral richness, the world is not going to run out of stocks of rhodium – nor any of the other platinum group metals – for the foreseeable future. There are estimated reserves of 3,000 tonnes of rhodium still in the ground, waiting to be unearthed. Unlike in the very early years, when the ore deposits were easily accessible, it now takes a little more effort to get the metal out of the ground. With underground mines between only a few hundred metres and a maximum of 2,200 metres deep, the challenges for South Africa’s platinum producers are in fact comparable to the ones that its gold industry is facing, which currently plans expansion that will lead to depths of more than 4,000 metres.
Different types of catalytic converters are used for cleaning harmful exhaust pollutants. As well as automobiles, their use has now spread to motorcycles, lawn mowers – and even chainsaws.
An Indispensable Element
The efforts the South African mining industry are undertaking are probably worth it, as some industries are waiting desperately for an increase in supply to bring prices down, or at least to enable them to not have to live from hand to mouth as far as metal availability is concerned.
The major user of the white metal has remained unchanged for the past 30 years: it has been the automobile industry, ever since the metal was introduced into catalytic converters of cars because of its ability to turn nitrogen oxides – responsible for the acid rain so widely discussed during the 1980s – into harmless nitrogen.
With its share of nearly 870,000 ounces, more rhodium is used by the automobile industry than it is actually newly mined. The resulting gap between fresh supply and that high demand is filled by an increasing recycling quota that accounts for every fifth ounce of rhodium that is employed in car catalysts. Ten years ago, the share of metal coming from the recycling of scrapped catalytic converters was only half of today’s percentage rate, and –as the amount of metal used then was considerable lower – only a fourth of the absolute number of ounces.
Of course there have been as many attempts to reduce the rhodium loadings in car catalysts as there were different engine models. But so far any successes in that field have always been neutralised in the medium term by another change in legislation, which required yet again a higher metal loading in order to fulfil the tightened limits. That is exactly what happened in Europe after the introduction of EURO 4 emission standards in 2005 (and comparable regulations in other countries). But now for the first time it looks as though the next level in emission standards, EURO 5, might not bring consumption back up to the old levels. EURO 5 will become mandatory for all new car models in September 2009, and for all new cars in January 2011.
Falling consumption in the automobile industry would be good news for the two other main industrial end-users of rhodium, namely the chemical and glass industries. The latter uses rhodium, alloyed with platinum, for the production of high-quality glass. The build-up of new production facilities for flat-panel display glass in Asia has kept annual demand from that sector between 1.5 and two tonnes for the last three years, and a few more expansion projects have already been announced. Nonetheless, the demand for platinum and rhodium from that sector might have seen its peak in 2006, and is likely to fall back again during the coming years to the long-term average of one tonne per year.
Apart from flat-screen glass production, rhodium (in combination with platinum) is also used to manufacture fibreglass. Here the metal is used in bushings, nozzles and spinnerets. Unlike in the car industry and some parts of the chemical industry, rhodium is not continually consumed in the glass sector. Instead it is kept in a closed loop – when a second set of metal is needed for the manufacturing of new equipment prior to the recycling time of the old one, it is usually borrowed rather than purchased.