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Investing in Palladium

Palladium is much rarer than gold and total global annual production can be measured in mere hundreds of tons.

Palladium is used in electronic devices and jewellery, being somewhat harder than platinum, but perhaps its best-known use is in catalytic converters in cars.

Most of the world’s palladium comes from mines in Russia and South Africa, who account for around 40% of production each.  Canada, the United States and Zimbabwe are also significant producers.

Russian company MMC Norilsk Nickel (“Nornickel”) is the world’s largest producer of palladium and high-grade nickel and a major producer of platinum and copper.  Eurasia Mining LON:EUA is also a leading producer.

Geopolitical risks accompany the production and consumption of most metals, but it is notable that the world’s largest palladium producer, Russian miner Nornickel, has had to “mitigate risks that arose from economic sanctions” on its home country.  Similarly, as we reported at the time, Eurasia Mining’s share price was affected significantly by the Russia-Ukraine conflict.

In addition, there is a shift away from palladium and towards platinum for use in catalytic converters, since platinum is more efficient at removing pollution.

While you are able to buy physical palladium as bullion, many people prefer instead to trade funds that provide exposure to the metals.  These include the Aberdeen Physical Palladium Shares ETF [LON:PALL] and the Sprott Physical Platinum & Palladium Trust [TSX:SPPP].

The Global Palladium Fund (GPF) also provides exposure to platinum-group metals as exchange traded commodities, and stores physical palladium in warehouses.

We are unaware of any dedicated palladium-only mining companies, with even Palladium One Mining TSXV:PDM also producing copper and nickel.

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