Two Continents, One Basket: The PGM Supply Mix Explained

The platinum group metals are not produced independently. They come out of the ground together in fixed ratios determined by the geology of two specific orebodies, and no amount of market signaling can change those ratios in the short run.

The geological reality

Russia's Norilsk Talnakh deposit is palladium-rich: roughly 3.5 ounces of palladium per ounce of platinum. South Africa's Bushveld Complex is platinum-rich: about 1 ounce of palladium for every 2 ounces of platinum on the western limb, with the ratio shifting on the eastern limb.

• Norilsk: Pd:Pt ratio of approximately 3.5:1
• Bushveld Western Limb (Anglo, Impala): Pt:Pd of 2:1
• Bushveld Eastern Limb: roughly 1:1
• Stillwater (Montana): heavily palladium-skewed at ~3.6:1
• Lac des Iles (Canada): nearly pure palladium

Why miners cannot rebalance

If platinum trades at a premium, you cannot simply mine "more platinum" from a Russian shaft. The metals come out together. You can only mine more ore, which gives you proportionally more of every metal in the basket.

"The PGM basket price is what matters to a CFO. The split between platinum, palladium, and rhodium is decided by the rocks, not the trader." - Anglo American Platinum investor day, 2022

The basket price as the real signal

Mining decisions track the combined revenue per ton of ore, not any single metal. When palladium spiked in 2019-2021, Russian production economics looked spectacular while South African margins were merely fine. After palladium collapsed and platinum stayed flat, the situation reversed.

What investors should track

Watch the 4E or 6E basket price (platinum, palladium, rhodium, sometimes plus iridium and ruthenium). When the basket falls below all-in sustaining cost for the marginal South African shaft, supply shutters and the floor forms. That is the real bottom signal, not any individual metal chart.

Bottom line: PGM supply economics live and die by the basket. Investors trading individual metals without watching the combined revenue picture are missing the actual signal that drives mine output.