Sibanye-Stillwater Explores Use Cases For Rare Metal The Auto Sector Needs Less Of

Author: Stjepan Kalinic | February 16, 2024 11:01am

Precious metal producer Sibanye-Stillwater (NYSE:SBSW) is exploring palladium applications within the hydrogen market.

“Over the longer term, demand for palladium in the automotive sector is expected to decrease, creating an opportunity to consider new applications for the metal," said Sibanye-Stillwater CEO Neal Froneman.

Palladium is a rare metal that’s used to reduce harmful emissions from vehicles. Within the catalytic converters, it facilitates the conversion of toxic gasses, such as carbon monoxide and nitrogen oxides into less harmful substances like carbon dioxide.

Nowadays, palladium is seeing a drop in demand as more automakers shift to electric vehicles, or EVs. Prices for the metal recently fell below platinum’s for the first time since 2018. Palladium also faced a significant price decline of more than 40% last year, primarily due to weakened demand from China.

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The shifting dynamics within the industry also led to layoffs and mine closures. Sibanye-Stillwater cut about 300 U.S.-based jobs last November.

The company will likely cut as many as 7,000 in its native South Africa.

Sibanye-Stillwater’s new joint venture with precious metals refining company Heraeus Precious Metals aims to chart a new course for palladium.

Turns out, palladium can play a role in applications involving hydrogen. It is a widely used catalyst in the direct synthesis of hydrogen peroxide (H2O2) owing to its excellent hydrogenation activity. Its potential applications include purification processes during blue hydrogen production, cracking of hydrogen carriers, and utilization in the semiconductor industry, where high-purity hydrogen is essential.

And in the automotive industry, hydrogen presents a clean and convenient energy source, with its byproduct being water.

"We expect hybrids to become the dominant engine type underpinning demand for palladium in the medium term," Froneman said, in line with South Africa's strategy to use green hydrogen.

A successful innovation would lower the prices. Green hydrogen currently ends up six to eight times more expensive than the standard energy options. It also requires hundreds of billions of dollars in subsidies to support its production.

Heraeus and Sibanye previously collaborated on a ruthenium-based catalyst to reduce reliance on iridium in proton exchange membrane water electrolysis. This move cut material costs and reduced dependence on scarce and expensive iridium.

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Image: Courtesy of Sibanye-Stillwater

Posted In: SBSW