Sibanye-Stillwater, a leading precious metals producer listed on both the Johannesburg Stock Exchange (JSE: SSW) and the New York Stock Exchange (NYSE: SBSW), has partnered with Heraeus Precious Metals, a prominent metals trader and recycling firm. Together, they aim to unlock new applications for platinum-group metals (PGM), with a keen focus on palladium, within the burgeoning hydrogen market.
This collaboration comes at a critical time when palladium, traditionally buoyed by its use in auto catalysts, has seen its price plummet by over 40% in the past year. The decline, largely attributed to diminishing demand from China, marked a significant market shift as palladium prices fell below those of platinum for the first time since 2018.
The joint venture, funded equally by Sibanye-Stillwater and Heraeus, is set to explore the potential of palladium beyond its conventional automotive applications. “With the expected decrease in palladium demand from the automotive sector, it’s crucial to identify new uses for this metal. Palladium’s high selectivity for hydrogen positions it as a versatile candidate for a variety of applications,” the partners stated.
The auto industry, which accounts for eighty percent of palladium’s demand, witnessed a sharp decline in consumption by almost 40% in 2023. This downturn is due to a shift towards cheaper platinum alternatives for emission-reducing devices and a growing preference for electric vehicles (EVs) among consumers.
Sibanye-Stillwater and Heraeus are optimistic about creating a “sustainable PGM supply basket” that includes not only palladium and platinum but also critical raw materials like iridium, ruthenium, and rhodium. “We anticipate that hybrid vehicles will become the predominant engine type, sustaining the demand for palladium in the medium term. However, to adapt to evolving market demands, the PGM industry must innovate and ensure the stability of the market,” commented Neal Froneman, CEO of Sibanye-Stillwater.
The decline in palladium and platinum prices has prompted producers in South Africa, including Sibanye-Stillwater, to implement drastic cost-cutting measures. The company has announced job reductions at its U.S. mines, affecting approximately 7,000 employees. Similarly, Impala Platinum Holdings has initiated voluntary severance programs, including at its Rustenburg complex, while Anglo American Platinum (Amplats) has engaged in discussions with the government regarding potential workforce adjustments.
This partnership between Sibanye-Stillwater and Heraeus signifies a pivotal step towards diversifying the applications of palladium, particularly in the hydrogen industry, aiming to stabilize and potentially rejuvenate a sector challenged by fluctuating demands and prices.
