Nornickel Seeks R&D Solutions in a Bid to Augment Palladium Demand Structure
(Photo : Nornickel Seeks R&D Solutions in a Bid to Augment Palladium Demand Structure)

Russian miner - the biggest palladium supplier on the planet announced Palladium Challenge - a competition designed to explore alternative applications of palladium, a rare precious metal, which is currently used mainly in the car industry to clean exhaust fumes.

The competition is held jointly with the International Precious Metals Institute (IPMI) and the prize fund is as large as $ 350,000.
 
"The Palladium Challenge is an enterprise designed to inspire inventors, businesses and scientists to research and develop a sustainable use and request scenario for this precious metal," the Russian company said in a statement. Palladium accounts for 44% of Nornickel's sales.
 
The demand for the silvery-white metal, one of the six in the so-called platinum group metals or PGM weakened this year in response to production cuts in the automotive industry due to a semiconductor shortage.
 
Anton Berlin, head of sales at Nornickel, said that the precious metal has enormous potential not only in the autocatalyst field, but in many other industries, including hydrogen-based power infrastructure, electronics, and carbon intensity-reducing solutions. The competition aspires to attract scientists from all over the world. The miner hopes this competition will help bring out extraordinary research ideas.
 
The Palladium Challenge will be judged by a panel of experts. The winner will receive $200 thousand, the runner-up $100 thousand, the third place will take home $50 thousand. The results of the competition will be announced in September 2022.
 
Demand for palladium is being fuelled by tighter emissions regulations, as well as a changed consumption pattern following the diesel scandal in 2015 - the so-called diesel-gate, when a scam at Volkswagen of measuring emissions in diesel engines using platinum was exposed.
 
Gasoline and hybrid vehicles, which rely heavily on palladium-based exhaust after-treatment systems, continue to replace diesel vehicles.
 
In addition to the automotive industry, the metal is also used in electronics, chemical catalysts, dental and jewellery industries.
 
Late last year Nornickel launched the first palladium-backed token. This event sparked a real revolution in the metals market and opened new opportunities for consumers of products from all over the world.
Nornickel's Global Palladium Fund issued the first tokens to industrial clients in December 2020. And in January 2021, palladium-backed tokens were quoted on the German stock exchange Deutsche Börse.
 
In 2019 Nornickel's CEO Vladimir Potanin said that the introduction of a blockchain platform and emission of tokens backed by physical metal would allow the company to sell 20% of product in digital smart-contract format.
Experts noted that raw material markets operate according to laws that were formed hundreds of years ago, and the transactions that are made there are a very bureaucratic process. Only a limited number of transactions can be carried out per year, it is extremely difficult to gain access to the market, and it is even more difficult to change the parameters of supplies in accordance with the needs of buyers and the changing situation on the market. In such circumstances, prices are often influenced by various factors, so they can vary significantly outside the influence of the supplier.
 
A crucial advantage of working with tokenised metal is the ability to buy it in convenient proportions, and without worries associated with storage, transport and protection of metal - indispensable attributes of "paper" or traditional purchase of raw materials, experts noted.
 
Another advantage is the price. Instruments such as ETCs - exchange traded commodities - already listed on several key exchanges in the world, are available at an unprecedentedly low expense ratio, the lowest on the market currently. The last, however, very important advantage of working with tokenised metal: the ability to reliably trace the origin of raw materials from mining to its disposal, in the case of Nornickel's product, from ore and the smelting shop to finished goods and their disposal. The blockchain makes it possible to record and store information about how the metal was mined and its environmental impact. As the world is headed to a greener economy, products from responsible manufacturers with a low carbon footprint are in high demand. And products from other manufacturers that do not provide tracked data and do not adhere to ESG principles will soon be difficult to sell.