Jun-2011

Platinum profits

Assesses the impact of platinum group metal values on the profit margins of precious metal catalyst users

Richard J DeSantis
Sabin Metal Corporation

Article Summary

The global economic crisis of the past few years has been rough on virtually all sectors, although there are notable exceptions. One such anomaly is the precious metals commodities market, within which prices are booming. The current high cost of precious metals (specifically platinum group metals (PGMs) including platinum, palladium, rhodium and ruthenium) is having a direct effect on refining profit margins, as these materials are widely used in hydrocarbon and petrochemical processing applications.

Due to high PGM values, users of PGMs (or other precious metals such as rhenium, gold and silver) are paying significantly more for their fresh catalysts than in the recent past. For example, current platinum and palladium prices are at near all time highs of US$1800/oz and US$750/oz respectively at at the time of writing.

Hydrocarbon/petrochemical processors use fixed-bed reaction catalysts to facilitate hydrogenation of various intermediates. These catalysts may also be used to control and/or abate harmful or unlawful exhaust emissions for end of pipe applications. Regardless of how catalysts are applied (or whether they take the form of monolithic structures, pellets, beads or extrudates, Figure 1), eventually catalyst users must work with a precious metals refiner to recover the valuable metals from substrates and carriers such as soluble or insoluble alumina, silica/alumina and zeolites.

The rising costs of PGMs
As costs for PGMs and other precious metals rise, catalyst users will face a classic profit squeeze if recovery/refining processing turnaround time increases along with lease rates for precious metals (as they are likely to do). While any one of these factors will decrease profits, the combination of all three could potentially trigger a “perfect storm” with obvious negative effects. Precious metal lease rates, for example, are generally directly influenced by precious metal values. With extraordinarily high PGM prices, users are thus forced to seek relief in a number of different ways. Given that PGM users cannot control commodities prices, the next best place to turn is to a precious metals refiner. This is because the refiner has a measure of control over precious metals management, particularly with regard to recovery and refining returns.

To this end, it is prudent for precious metal catalyst users to learn as much as possible about the processes, procedures, history, customer relationships and environmental policies of the relevant refiner, either directly or from outside sources. Armed with this information, it is easier to reach an informed decision regarding the selection of a precious metals refiner that meets the particular idiosyncratic needs of a given operation.

Precious metals refiners
Many organisations recover and refine PGMs and other precious metals from spent catalysts. While they all essentially perform the same function, it is important to be aware of some considerable differences between them, as these can have a significant impact on returns and, critically, affect the risk of litigation through exposure to local or foreign environmental and regulatory governing authorities. Therefore, it is in the user’s best interest to learn as much as possible about the precious metals refiner under consideration. For example, information regarding how the refiner processes spent catalysts and what equipment and procedures it uses should be on hand. Particular areas of interest include the refiner’s process contamination removal methods, material sampling and assaying methods, environmental protection policies and procedures; compliance with international trade and logistics policies; and (perhaps most important) the refiner’s reputation with its long-term customers. All of these issues and more will have an impact on the relationship established with the precious metal refiner.

Risk of litigation
There are significant legal implications that must be considered when working with a precious metals refiner. These primarily concern environmental issues such as possible effluent or atmospheric discharges at the refiner’s facility. This is because violations are taken incredibly seriously by controlling organisations, and any oversights may result in both the refiner and the refiner’s customer being held liable for any violations. Based on these concerns, choosing the wrong refiner could result in a costly mistake.

Recovery and refining
The process of reclaiming precious metals from spent catalysts is referred to as “recovery and refining”. This umbrella term covers many specialised procedures, including materials documentation, contamination removal, sampling, assaying, recovery, refining, environmental considerations and total turnaround time. Each of these functions is independent; however, together they will have a dramatic affect on how much of remaining PGMs are recovered, the speed at which they are recovered and the value returned to the user. Consequently, these procedures impact the overall costs associated with an organisation’s precious metals management programme. While each of these functions is important, sampling procedures are perhaps the most critical elements with regard to determining the amount, and thus the value, of the precious metals in spent catalyst lots. It is in the user’s best interest to understand how sampling is used to determine the precious metals content of spent catalysts.

Precious metals sampling
Most precious metal refiners use three common sampling techniques: dry sampling, melt sampling and solution sampling. Each of these techniques offer specific advantages, but the most appropriate sampling method depends upon the type of material being processed as well as its estimated precious metals content.

Some precious metal bearing materials can be sampled only by one of these three methods, but others may be processed by more than one method. The method chosen will depend on variables including the estimated value of the precious metals content; the cost effectiveness of using one method over another for the most accurate results; practicality (a function of refining costs, materials value and other factors). As precious metal bearing catalysts are made with various substrates (and in many sizes and configurations), determining the best sampling technique is crucial to ultimately recovering the most value from the spent catalyst.