Platinum Group Metals
(Iridium, Osmium, Palladium, Rhodium
and Ruthenium are Platinum's sister metals)Platinum's relative scarcity in the face of newly discovered and ever-increasing uses makes for an attractive 21st century investment. Platinum's historical price performance and its unique fundamentals are attracting an increasing number of informed investors. Sophisticated investors have long recognized the importance of owning precious metals as a means of stabilizing their financial portfolios. Precious metals tend to appreciate in value during periods when other financial assets are declining. Political turmoil, currency crises and inflation are just a few of the reasons investors seek out the haven of precious metals.

Gold and silver have typically provided investors with an effective hedge against uncertainty. Today, knowledgeable investors also recognize that platinum can play an important role in their investment strategies, as a component of a diversified portfolio. Like the other precious metals, the price of platinum is driven by basic supply and demand forces. The following factors are expected to either increase demand or reduce supply (or both), therefore enhancing the value of platinum:

1) New and more stringent emissions control regulations worldwide have spotlighted platinum's role in fighting pollution. More vehicles are using platinum-based catalytic converters, and the recent revival of world economies (1994-95) has helped vehicle sales. As the fight to reduce pollution grows, platinum demand should continue to rise.
2) Platinum jewelry appeal continues to be strong, especially in Japan. Despite Japan's recent recession, platinum jewelry sales are constantly rising as younger consumers enter the market. Consumer demand for platinum jewelry is growing rapidly outside Japan as well, particularly in the bridal market.
3) Although platinum demand continues to grow, supplies are not expected to increase in the near future. Russian platinum sales have begun to decline in recent years due to a variety of internal economic factors, preventing their normal levels of platinum production. Also, South African mines have recently completed long term expansion plans and will likely be reluctant to increase platinum production in the near future.

Between 5-15% of all platinum mined goes into legal tender coins and small bars of pure metal. In a variety of sizes, from one gram to one kilo, they are recognized and traded around the world as an integral part of the highly liquid platinum investment market. The many faces of platinum, in industry, jewelry, and coins, should make this modern precious metal an appealing investment for years to come.

The recorded history of platinum began in the 16th century, when the Spanish Conquistadors discovered it in Colombia. Its true significance, however, was not recognized until 1803 when William Wollaston, a British scientist, was able to extract platinum from its close molecular bond with other metals, such as palladium and rhodium. In 1828, Russia became the first major country to mint platinum coins. In 1907, Cartier made the first wristwatch fashioned from platinum, and by the Art Deco period, platinum had become the most fashionable precious metal used in jewelry in Europe and in the United States.

Platinum's remarkable qualities make it essential for a myriad of uses. Its molecular weight (almost twice that of lead), unusually high melting point (3,215'F) and extreme durability are useful in high temperature, high pressure production. The metal also has strong catalytic properties, which allow it to quicken chemical processes, and its inert nature makes it useful in products requiring contact with human bodies. Platinum is also highly sensitive and conductive, and therefore ideal for applications in radar and high-tech sensors. Today, platinum is considered one of the most vital and versatile elements available to mankind. Whether as elegant jewelry, medicine, a chemical catalyst, or an investment, platinum makes diverse and unparalleled contributions to our everyday lives.

Platinum is well known for its traditional role in the production of coins and fine jewelry, its artistic contributions are only part of the story. The number and scope of platinum's industrial uses have risen during this century, to include neurosurgical and dental equipment, drugs for cancer treatment, computer and automotive machinery. In fact, one of every five goods manufactured either contains or is produced using platinum. It is considered a strategic metal by the U.S. Government due to its role in the defense, medical and telecommunications industries. Platinum is even stockpiled by the government for possible defense emergencies.

One of its most essential uses, however, is in auto catalytic converters. Within autocatalysts, platinum converts harmful emissions into carbon dioxide and water. Nearly 35% of newly mined platinum is utilized in this fashion. Due to its function in the automotive industry, it has been dubbed "the environmental metal."

While new uses for platinum are being discovered almost daily, its supply is extremely restricted. Remarkable difficulties exist in its mining and production, with only about 130 to 140 tons of pure platinum mined per year worldwide; that figure is less than 5% of gold production and less than 1 % of silver production. All of the platinum ever mined would fill a room measuring less than twenty-five cubic feet! Refining the metal poses its own problems; platinum occurs naturally in combination with other metals, necessitating an intricate process that takes about six months. This problem is exacerbated by the limited sources of platinum production. South Africa and Russia produce approximately 90-95% of the world supply. Unlike gold, there are no central bank holdings of platinum. If the main producers were to interrupt mining and production, aboveground platinum reserves would last an estimated one-to-two years for critical uses. By contrast, if gold production was stopped, existing reserves would probably last over 30 years for critical uses.

Platinum Facts

» Did you know that platinum has a melting point of 3,215 degrees F. but when combined with its five sister metals (Iridium, Osmium, Palladium, Rhodium and Ruthenium) they create a strong alloy that resists melting at temperatures up to 4,000 degrees F?
» Did you know that platinum was used to counterfeit Spanish gold coins in 1865 & 1868? The coins were plated with gold and sold as authentic gold coins. Today, the fake coins are worth more than the genuine item.
» Did you know that you would get sick flying in a jet airliner without a platinum catalyst which eliminates the ill effects of ozone that is present in the higher levels of our atmosphere?
» Did you know that platinum is used in the refining of oil to boost the octane rating of gasoline and jet fuel?
» Did you know that a six-inch cube of platinum weighs about as much as an average man?
» Did you know that platinum is one of the densest of all the metals? Platinum is 11 % denser than gold and weighs twice as much as silver and lead.
» Did you know that all of the platinum mined around the world last year is equivalent to just five seconds of annual steel production?
» Did you know that Ernest Hemingway had a platinum knee as a result of injuries suffered in WWI?
» Did you know that the World Cup Soccer Trophy is made of platinum?
» Did you know that platinum is sprayed onto metallic computer data storage disks to retain the programmed data? These disks are used by the world's leading disk-drive makers.
» Did you know that Faberge, the jeweler to the Russian czars, used idlatinum to adorn his famous eggs?
» Did you know one gram of platinum can be stretched into a wire that is over 2,000 meters (over a mile) long?
» Did you know that platinum is used in automobile spark plugs?
» Did you know that platinum has been found in meteorites that hit the Earth in the dinosaur age?

Platinum Fact data provided courtesy of Platinum Guild International (USA) Inc.

Uses of Palladium

Japan's dominance as the leading consumer of palladium has eroded in the last decade. In the late 1980s, Japan consumed about 50% more palladium than did North America and about 2.5 times more than Europe. By 1996, the estimated shares of demand by Japan and North America were about equal, while Europe accounted for almost one quarter of demand in market economy countries. The reason for the accelerating demand in North America has been the use of palladium in autocatalysts; net demand in this sector in North America has risen almost ninefold since 1986 to 36.2 t. Similar to platinum, the pattern of Japanese demand for palladium differs from that in Western Europe and North America. In Japan, the major use for the 65.8 t of palladium used in 1996 was in electrical applications, representing about 59% of Japanese industrial demand. In North America and Europe, which used 65 t and 45.9 t respectively, just over half of their industrial demand for palladium is accounted for by use in autocatalysts. On a worldwide basis, autocatalysts are the leading consuming sector for palladium, slightly edging out the electrical sector. The sectorial net industrial demand (excluding investment offtake) in 1996 for market economy countries was estimated at 65.9 t for electrical, 40.7 t for dental, 66.4 t for autocatalysts, 6.2 t for jewelry and 6.2 for other. Palladium usage in the electrical sector has increased along with the rapidly rising demand for electronic goods such as personal computers, mobile phones and video cameras. The newer generations of electronic equipment also use more multi-layered ceramic capacitors (MLCC) that contain palladium. While nickel has made limited inroads into this use, palladium still provides superior performance and ease of manufacture. Declining palladium contents in individual components have been somewhat offset by increased MLCC use. The third largest use for palladium is in dental alloys, orthodontic devices and prosthodontic devices. Other industrial uses for palladium include industrial catalytic applications, pharmaceutical and nitric acid production, petroleum refining, and jewelry. Autocatalysts have been described above in the section on platinum.

Uses of Rhodium

Unlike platinum or palladium, Japan did not dominate the much smaller rhodium market of 13 t in 1996. Both North America and Western Europe consumed more rhodium in 1996 than did Japan. Autocatalysts account for over 85% of rhodium consumption in market economy countries. Small amounts of rhodium were used in the chemical, electrical and glass industries. In these applications, rhodium is used with other PGMs to produce an alloy with enhanced physical or catalytic proper-ties.

Consumption of other PGMs

Ruthenium and iridium demand is much lower than the demand for platinum or palladium. Estimated demand in 1996 for ruthenium was 10.7 t, and for iridium was estimated at about 2.0 t. Demand data for osmium are not available. Ruthenium has a variety of uses; the most newsworthy in 1996 was its use as a catalyst in the Kellogg Advanced Ammonia Process. The use of ruthenium instead of iron as a catalyst permitted lower operating pressures, which in turn saves power costs. Other applications include its use in the manufacture of chlorine and caustic soda. Half of the demand for iridium comes from the electochemical sector. Iridium-ruthenium alloys have been used instead of ruthenium for electrodes in chlor-alkali plants. Iridium has also displaced rhodium catalysts used to make acetic acid. Other uses include minor amounts in autocatalysts used with direct fuel-injection engines and in electrolytic cells to produce sodium chlorate.