Business

Forget gold and cash, thieves want rhodium

2020-01-21 15:48

Robbers seem to think cash and gold are a thing of the past. This was made evident by a failed robbery at Sasol’s Secunda plant, during which robbers targeted the metal rhodium.

At Friday’s price of $8 100 (R117 000) per fine ounce, the relatively unknown metal makes gold ($1 555) and platinum ($1 022) look like monopoly money.

Rhodium is a by-product of platinum.

Heavily armed robbers broke into Sasol’s Secunda plant, a national keypoint, last Sunday.

City Press’ sister publication, Rapport, understands that they specifically demanded rhodium.

According to Sasol’s 2014 annual report, a rhodium reclamation plant is to be installed at Secunda.

Sasol confirmed the robbery, but did not want to comment on information that the robbers were after rhodium.

The company did not say how much rhodium was kept at the plant.

“The robbery attempt was unsuccessful. The incident was handled according to internal procedures and the company is offering counselling to all employees,” a spokesperson said.

No one from the Solvent Safe unit was seriously injured.

The price of rhodium has increased dramatically in the past year. So far this year it has increased by 32%. By mid-2015, rhodium’s price was about $800 per fine ounce.

The metal is used mostly in catalytic converters to reduce harmful exhaust gases.

Arnold van Graan, a mining analyst at Nedbank, said investor interest was definitely piqued by the high price, amid much lower stockpile levels.

Investors also realise that the supply and demand of the platinum group metals (PGM), of which rhodium forms a part, can lead to price increases in the next few years as rhodium shortages increase.

Simon Brown from Just One Lap said that, apart from low stock levels, there is a high demand for rhodium – the rarest of the PGMs, partly because it is very difficult to extract.

Analysts said higher rhodium prices were good for South African producers, who are responsible for more than 80% of world production

It has a very high melting and boiling point.

Brown said it was difficult to sell rhodium on the open market. There are few suppliers and even fewer buyers.

Vehicle manufacturers use a few grams per catalytic converter, but they buy in bulk, said Brown.

Rhodium is used in optical instruments and in electric connections, the website, thebalance.com, reported.

Bloomberg said most transactions were between suppliers and industry consumers.

There were, however, funds through which investors could invest in rhodium directly.

According to the US Geological Survey, catalytic converters were responsible for 77% of the demand for rhodium in 2010.

About 7% of worldwide consumption was in the chemical sector (including for the production of fertiliser) and a further 6% of rhodium was used in the production of glass.

Bloomberg reported that much stricter rules on exhaust gases had boosted the price of rhodium in the past few years.

Speculation was that more investors were taking an interest in rhodium, which could push the price to record levels, even higher than in 2008.

Like palladium, rhodium is mined as a by-product of platinum and nickel, but has a much smaller market and is therefore susceptible to big variations in price as supply and demand changes.

Analysts said higher rhodium prices were good for South African producers, who are responsible for more than 80% of world production.


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April 5 2020