We should all be able to breathe a little easier with Ontario Mining Association member North American Palladium’s plans for expanding production. Palladium is resistant to oxidation and high temperature corrosion and is useful in eliminating harmful emissions from internal combustion engines. Autocatalysts are the major end use product of palladium, converting more than 90% of hydrocarbons, carbon monoxide and oxides of nitrogen into carbon dioxide, nitrogen and water vapour.
The company’s Lac des Iles mine, which is located approximately 85 kilometres north of Thunder Bay, has been in production since 1993. It has about 200 employees and it is one of only two primary palladium mines in the world.
At this time, North American Palladium’s Lac des Iles mine is involved in a multi-faceted $270 million mine expansion program. The goal is to increase production from 95,000 ounces of palladium in 2010, to 165,000 ounces in 2011 and then gradually building up to 250,000 ounces in 2015 at significantly reduced cash costs, which are expected to be less that $150 (US) per ounce. The current palladium price is in the $800 (US) per ounce range.
“With a growing reserve and resource base and a rising production profile, Lac des Iles’ mine expansion is well timed to benefit from the increasing price of palladium, which was the best performing metal in 2010,” said William J. Biggar, North American Palladium’s President and Chief Executive Officer.
Global demand for palladium is expected to continue to increase. Emerging economies are adopting improved emission control standards, which leads to more palladium use in catalytic converters. More than half the use of palladium is automotive and every time China hikes its emission control standard, the demand for the metal increases by about 10% in that category of usage.
Other applications for palladium are in electronics, jewelry and dental devices. As we move towards a greener economy, palladium is finding its way into applications for fuel cell technology, oil refining, water purification and medicine.
While future demand for palladium looks good on a global basis, North American Palladium is not putting all its eggs in that basket. The company acquired the Sleeping Giant gold mine, located in the Abitibi region of northwestern Quebec, in 2009. The mine has produced on average about 58,000 ounces of gold annually over its 20 year operating life.
Last year, the Sleeping Giant mine turned out about 18,000 ounces of gold and the 2011 forecast is for 30,000 to 35,000 ounces. By 2012, the output is projected at 40,000 ounces to 50,000 ounces of gold. The current price of gold is above $1,400 (US) per ounce.
North American Palladium is investing in its future through aggressive exploration programs this year. The company has dedicated $8.8 million for further exploration at the Lac des Iles Mine and $9.1 million for gold exploration.
North American Palladium www.nap.com is a long-standing and active member of the OMA. This article is the ninth in a series of profiles of OMA member companies and their contributions to the vitality of Ontario’s society and economy.