Rhodium
When discussing precious metals, the attention tends to be focused on gold, and maybe a few other elements like silver and platinum. These are all metals we previously covered in dedicated articles:
Still, there are other rare metals equally precious that are less known, such as rhodium. It is part of the platinum group of metals, together with ruthenium, palladium, osmium, and iridium.
Source: Wikipedia
Rhodium is a silver-white metal that is very chemically inert, making it very resistant to corrosion from even the most aggressive chemicals. It is also very stable and relatively hard at high temperatures.
It is also a very rare metal, making up only 0.0002 parts per million of the Earth’s crust. This extreme rarity has made it difficult to find in any concentrated ore, and expensive.
Rhodium Price & Market
As mentioned, rhodium is very rare while also useful, leading to high prices. Its price has seen a few bull markets in the past, notably during periods of economic boom and high market valuation in 2000, 2008, and 2021.
Source: Money Metals
Most of the time, rhodium prices are higher than pure gold.
Rhodium price is mostly affected by 3 factors:
- Fluctuation in demand, especially from the automotive industry (see below).
- Production, with supply, often struggling to meet demand.
- Recycling can be a contributing factor to crashing rhodium prices during economic recessions.
Rhodium Production
Due to its extreme rarity, rhodium is generally produced commercially as a by-product of the extraction of other metals, notably nickel, copper, and platinum ores.
The largest sources of rhodium are located in South Africa, Russia, Zimbabwe, Canada, and the USA. However, of all these sources, the dominant reserves are owned by a very far margin by South Africa (63,000 tons), followed by Russia (3,900 tons), for a global total of 70,000 tons.
Source: Raw Material Outlook
The global annual primary production of rhodium fluctuates around a mere 20 tons, with Zimbabwe and the USA being relatively large producers compared to their reserves.
Source: Raw Material Outlook
Besides production from mines (primary production), recycling (secondary production) contributes a significant amount to global supply.
Source: Raw Material Outlook
For a long time, rhodium was not exchange-traded, leading to rather opaque pricing practices and markets. This changed in 2012 with the introduction of DB Physical Rhodium (XRH0).
The rhodium market is expected to grow 4.6% CAGR from $2.33B in 2023 to $3.5B in 2032.
Rhodium Applications
Automotive Industry
By far, the automotive industry is the largest consumer of rhodium, using up to 85% of total production.
Source: Raw Material Outlook
It is mostly used in auto-catalysts in car exhausts to eliminate harmful emissions released by vehicle exhaust pipes by catalyzing nitrogen oxides into nitrogen.
This is a chemical reaction rhodium is even more efficient at catalyzing than platinum, also used in the catalytic converters.
Usually, rhodium is alloyed directly with platinum, creating an alloy more resistant to corrosion and heat than pure platinum. Palladium is sometimes added or replacing platinum, mostly depending on their respective prices at a given time.
When combined, these platinum group metals form the core of a three-way catalytic converter, performing at once three different chemical reactions:
- Reduction of nitrogen oxides to nitrogen (N2)
- Oxidation of hydrocarbons (un-burned or poorly burned fuel) into CO2.
- Oxidation of poisonous carbon monoxide (CO) into CO2.
Recycling old catalytic converters is also the primary source of secondary rhodium production. The amount of rhodium in a catalytic converter is around 1-2 grams.
Glass
Specialty glass makes up around 7% of global rhodium consumption.
More precisely, the main application of glass manufacturing tools is for the production of fiberglass, a material used in electronics, construction, aerospace, and transportation. Fiberglass is also a key component of wind turbines.
In one step of the process, called wire drawing, the melted glass is passed through a porous bushing to be drawn into glass fiber strands.
Source: Fiberglass Fiber
The porous material used is made of platinum-rhodium alloys, thanks to its excellent thermal corrosion resistance.
Source: Fiberglass Fiber
The same properties of heat and corrosion resistance are useful for other glass manufacturing tools, like glass molding equipment and corrosion-resistant linings of furnaces.
It also ensures the high purity of glass used in optical glass (cameras, telescopes, and microscopes) and high-temperature-resistant glasses.
This segment is expected to grow in importance, especially with growing demand for wind power, high-quality solar glass (protecting photovoltaic cells), flexible / ultra-thin glass in foldable smartphones and wearables, and smart glass (changing properties like opacity in response to electrical signals).
Chemical Industry
Chemical is the other major secondary application of rhodium, here too leveraging its extreme stability and catalytic activities.
Due to its high reactivity with nitrogen compounds, it is widely used to produce nitric acid and acetic acid. It is also used for hydrogenation reactions, notably olefin hydroformylation, a key chemical reaction in the production of organic and hydrocarbon-type compounds.
The resistance to corrosion is also used for the production of rhodium-coated electrodes in Electrolysis Cells.
Energy
Gas turbines use rhodium-plated parts, such as blades, vanes, and combustion liners, because they are resistant to corrosion. This improves the service life and performance of the parts.
The nuclear industry also uses rhodium because it can withstand high levels of radiation, extreme temperatures, and corrosive environments in nuclear reactors.
Aerospace & Telecom
Rhodium’s excellent electrical conductivity leads to its usage in connectors and terminals in aerospace systems for signals and data transmission.
Radiofrequency (RF) connectors, microwave devices, and other high-frequency communication components use rhodium due to its stable electrical characteristics at high frequencies.
The thermal resistance of rhodium is also leveraged for components exposed to extreme heat and temperature fluctuations, such as rocket nozzles and heat shields.
Oil & Gas
Drilling tools and sensors plated with rhodium are used by the oil & gas industry in well drilling, as well as by the geothermal energy industry, for the same application.
Corrosion-resistance valves, fitting, pipes, and storage tanks can also use rhodium-plating.
Semiconductors
Rhodium is used to protect semiconductor elements likely to be exposed to moisture and corrosive gases, such as industrial sensors.
Rhodium is also used to coat electrical contacts in connectors, switches, relays, spark plugs, and other semiconductor components, including smartphone charging sockets.
Medical Devices
Pacemaker elements use platinum-rhodium to reduce risks of immune reaction and transmit electricity safely. The insulated wire transmitting the electric signal to the heart muscle has a contact tip made from rhodium-alloyed platinum.
Other surgical elements implanted in the body can also use rhodium, together with titanium.
The heart’s rhythm is adjusted by an endocardial electrode, and many other biomedical equipment solutions include rhodium.
Jewelry & Prestige Items
Due to its high price and extreme durability on par with gold, rhodium is sometimes used as a high-value metal for jewelry and other prestige-focused items.
It is notably used in coating sterling silver to protect against tarnish and with the technique called “rhodium flashing”, electroplating on gold or platinum jewelry, giving it a reflective white surface.
Solid pure rhodium jewelry is rarely used, due to the difficulty to melt and shape this metal.
When used as a prestige mark, it is often used to mark an achievement where gold or platinum is deemed insufficient, like for example in 1979, when the Guinness Book of World Records gave Paul McCartney a rhodium-plated disc for being history’s all-time best-selling songwriter and recording artist.
Ammonia Economy?
The often discussed, but so far elusive, hydrogen economy will likely require large use of ammonia, including directly burning ammonia for fuel on ships or for energy production.
This could give an extra usage for rhodium, due to its excellent capacity in degrading unwanted and toxic nitrous oxide, an unfortunate by-product of ammonia combustion.
Hybrid Cars
For a long time, a negative investment thesis on platinum, palladium, and rhodium was its quasi-obsolescence with the mass adoption of EVs and, with it, the obsolescence of catalytic converters.
However, it is becoming clear that the EV revolution might, in many places, be a bit slower than expected.
This is in large part not so much due to EV tech, which is progressing very quickly, but insufficient investments in the power grid and carbon-neutral energy generation (including nuclear).
Poor networks of charging stations in many countries also increase range anxiety for potential EV users and make it difficult for drivers to live in apartments without their own garages.
As a result, a growing trend is a transition phase seeing a mass adoption of hybrid vehicles before a full transition to EVs. Notably, the first half of 2024 saw a jump in hybrid sales by 44%!
“Hybrids remove what’s called “range anxiety. A lot of folks are saying instead, ‘Hey, the hybrid option works for me’. Or maybe I don’t have charging options at my home, and the hybrid offers that extended range.”
Charlie Howard – Auto Dealer Association marketing director
This could be a game changer for platinum, as every additional million hybrid cars sold creates a demand for roughly 150,000 ounces of PGMs.
Around 70 million cars are sold every year. If a significant portion of the current ICE cars become hybrid instead of EV in the coming decade, this could increase demand for platinum by much more than the current production can react to.
Investing In Rhodium
Rhodium is known as both an industrial and a precious metal. For a while, we have been expected to experience a decline in use from catalytic converter demand fading away, replaced by EVs. It might have received a lifeline with the recent popularity of hybrids in the energy transition process.
It is actually possible to directly buy rhodium for investment in physical metal form, with most precious metal bullion sellers offering coins and 1-5 oz metal bars of rhodium. Pure rhodium jewelry is also a possibility.
Physical platinum stockpiles can also be accessed through the 1nvest Rhodium ETF.
You can invest in rhodium-related companies through many brokers, and you can find here, on securities.io, our recommendations for the best brokers in the USA, Canada, Australia, and the UK, as well as many other countries.
If you are not interested in picking specific rhodium-related companies, you can also look into ETFs like VanEck Rare Earth and Strategic Metals ETF (REMX) which will provide a more diversified exposure to capitalize on the mining industry.
Or you can read our dedicated articles about “Investing In Platinum – The Universal Catalyst”, “Tungsten – The Secret High-Tech Metal“, “Investing In Titanium: Stronger than Steel and Denser than Aluminum”, and “Chinese Restrictions on Antimony Exports Highlight The Strategic Importance of this Metalloid”, which present similar opportunities and conditions with often ignored important strategic industrial metals.
Rhodium-Producing Companies
As rhodium is almost never found alone, it is mostly the by-product of the exploitation of platinum-rich ores. As such, there is a lot of overlap between platinum miners and rhodium miners.
1. Sibanye Stillwater
Sibanye Stillwater Limited (SBSW -1.97%)
By far the largest platinum-focused company, Sibanye Stillwater, is a leader in its industry. It is also the world’s largest rhodium producer.
South Africa produces 80% of the world’s platinum, and Sibanye Stillwater is responsible for a quarter of that production (Anglo-American is a much larger, diversified miner with a focus on copper and iron).
Source: Mining Technology
Besides platinum and rhodium, it is also a producer of other platinum group metals, such as palladium, iridium, and ruthenium.
Source: Sibanye Stillwater
It is currently diversifying to enter the gold and battery metal markets, notably for a lithium mining project in Finland.
Source: Sibanye Stillwater
In September 2024, Sibanye Stillwater announced that it would restructure its Montana Stillwater mine, cutting this mine’s output by 45% to reduce costs. The mine, which contains more palladium than platinum, has suffered from persistent low prices of palladium.
This led to a massive $435M impairment charge, causing the company to register a loss in H1 2024.
It is also worth noticing that current prices are barely enough to cover production costs for most platinum-rich regions, making it a bottom plateau for the industry before mine closure.
Source: Sibanye Stillwater
Because rhodium is a co-product of platinum and palladium mining, it is generally a nice “extra” to have for Sibanye Stillwater, which can be a very profitable additional source of income when prices shoot up, as its ore is mined anyway for the extraction of platinum.
Rhodium is also a product that is likely to benefit from the rebound of sales in hybrid vehicles, as it is most commonly used in platinum alloys used in catalytic converters.
2. Impala Mining / Implats
Impala Mining is the 3rd largest platinum producer in South Africa, has also large mining activity in neighboring Zimbabwe, and a palladium mine in Canada.
Source: Impala Mining
The company produced 3 million ounces of “6E” metals in 2023 (6E = 5PGM+Au, that is platinum, palladium, rhodium, ruthenium, osmium, and gold).
Due to the fluctuation of commodity prices, rhodium has at times been the largest revenue source for the company, like in 2023, while being a distant 3rd in other years like in 2024. So it is an important metal for the company, together with platinum and palladium.
Source: Impala Mining
The company’s 2 largest mines are Rustenburg in South Africa and Zimplats in Zimbabwe (Zimplats is owned at 87% by Impala, with other shares traded independently on the Australian stock market, under the ticker ZIM.AX).
Source: Impala Mining
Impala is overall a more rhodium-focused company than Sibanye-Stillwater, making it more vulnerable to the price fluctuations of this rare metal. Combined with operation in less than stable economically and politically Zimbabwe, this makes for a more risky, but also potentially more rewarding investment in PGMs.
