Gold, silver and platinum are the world's best-known precious metals. Yet the most valuable one is almost unknown: rhodium. In recent years its price has risen a staggering 265%, and according to market analysts it may keep climbing.
Rhodium is used mainly in automotive catalytic converters to reduce toxic gas emissions. David Holmes, vice president of trading at Heraeus Metals, a company that sells precious metals, said that because emissions control is a growing trend, the auto industry “is increasingly committed to meeting its environmental targets.”
Catalytic Converters
On the other hand, rhodium is mined in only a few countries (including Russia and South Africa), supply is scarce, and output from South Africa, the largest producer, is falling. The combination of high demand and low supply creates a great deal of market uncertainty. Ten years ago, rhodium sold for US$10,000 per ounce (31.10 grams), but in 2009 it fell to US$1,000. In August 2016 it hit its lowest price, US$639; in 2018 it climbed to US$2,300 per ounce; and in October 2020 it is above US$12,000 per ounce. This roller coaster is enough to make any investor nervous.
From Catalytic Converters to Jewelry Plating
Rhodium has a wide range of commercial uses thanks to its excellent electrical conductivity. Its high hardness also makes it suitable for alloys with other metals, which gives them greater corrosion resistance.
The electronics industry relies on it and uses it in some optical devices and certain types of mirrors. In jewelry, it is used in small amounts, which can make gold more durable and give it a brighter look.
There is no rhodium ore as such. Rhodium is actually a byproduct of other mining operations. In South Africa, which accounts for 80% of production, it is a byproduct of platinum mining. In Russia, it is a byproduct of nickel mining.
The drop in South African production has been attributed to falling platinum prices, which led mining company Impala Platinum Holdings to announce it would cut its extraction of the metal (and therefore of rhodium) in the country by one third by 2021.
The price is likely to keep rising, since China is focused on reducing vehicle pollution.
An Alternative to Black Rhodium
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