RE: Russian Mining Forecast7 Dec 2021 09:07
Palladium Production (Russia 2017-2023)
Indicator 2017 2018 2019 2020 2021f 2022f 2023f
Palladium Mine Production, moz 3.00 3.17 3.46 3.21 2.89 3.50 3.57
Palladium Mine Production Volumes, % y-o-y 7.14 5.67 9.05 -7.14 -10.00 21.00 2.00
Palladium mine production, moz, % of global 41.7 44.6 47.4 47.2 44.4 47.9 48.2
f = Fitch Solutions forecast. Source: USGS, Fitch Solutions
Palladium Production (Russia 2024-2030)
Indicator 2024f 2025f 2026f 2027f 2028f 2029f 2030f
Palladium Mine Production, moz 3.67 3.71 3.73 3.80 3.88 3.92 3.96
Palladium Mine Production Volumes, % y-o-y 3.00 1.00 0.50 2.00 2.00 1.00 1.00
Palladium mine production, moz, % of global 49.0 48.8 48.4 48.7 49.1 49.0 48.8
f = Fitch Solutions forecast. Source: USGS, Fitch Solutions
Structural Trends
Eurasia Mining To Dominate Sector Growth
We forecast Russian palladium production to rise from 2.89moz in 2021 to 3.96moz in 2030, representing average growth of 2.4% y-o-y., driven by Eurasia Mining’s active developments. The firm aims to bring its Monchetundra palladium-rich flagship project into commercial production in 2023. Monchetundra is fully licenced and will produce 1.7mnt per annum from its open pit once ramping up to full capacity in 2024. Eurasia Mining is also working on a definitive feasibility study (DFS) to expand production capacity at its West Kytlim PGM operations. At the same time, Polymetal International aims to complete a feasibility study for its Viksha deposit during the second half of 2021. The firm is scheduled to decide on the project in 2024 which could result in production commencement at Viksha in 2027. As one of the largest global, open-pit PGM deposits, Vishka has strong potential to boost Russian palladium growth in the longer term.
Norilsk Nickel will continue to account for approximately 90.0% of Russia's palladium production. Norilsk is primarily a nickel producer and also mines large amounts of palladium as a by-product. In 2020, the firm experienced a 2.0% y-o-y contraction in palladium production from its Russian operations, falling to 2.8moz. The reduction was attributed to an increase in work-in-progress inventory in transit to the firm's Polar Division, as well as high base effects from 2019.
Recovery In 2022, But Limited Pipeline To Constrain Growth.
Continued…