What Is Rhodium and Why Is Rhodium So Expensive

Why is rhodium so expensive? Rhodium is one of the most expensive metals in the world, second only to platinum. This element was discovered by the British chemist William Hyde Wollaston in 1803. Its price is approximately four times that of gold. Read this article to explore the reasons behind the high cost of rhodium.

What is rhodium?

First, let's take a basic look at this metal. Rhodium belongs to the platinum group of elements and has properties of high reflectivity. Rhodium typically does not form oxides; instead, when molten, it absorbs oxygen and releases it during the solidification process. Rhodium has an atomic mass of 102.91 and is listed as element 45 on the periodic table. This metal is characterized by its platinum-like appearance and highly reflective surface.

RHODIUM, derived from "rhodon," meaning "rose" in Greek. It gets its name because solutions of rhodium salts exhibit a rose-pink color, which is so beautiful and fascinating.

Why is rhodium so expensive?

The main reason for the high cost of this metal is its scarcity. Global reserves of rhodium are exceptionally low. Natural reserves of the platinum group metals in the Earth's crust are around 80,000 tons, with mineable reserves at approximately 71,000 tons. Rhodium accounts for only six percent of this total, while gold, which we use for jewelry, has reserves of 89,000 tons, significantly more than the combined reserves of the platinum group metals.

Only about 20-25 tons of rhodium are extracted from the Earth each year, an extremely small quantity. Approximately 80% of the world's rhodium is found in South Africa. Rhodium is so rare that there are no pure rhodium mines; Rather, it tends to be found only alongside ores of other metals, especially platinum and nickel.

As a result, the supply of rhodium lacks elasticity. Even with an increase in demand, rhodium production or supply cannot be quickly ramped up. Not only because the rhodium is extremely rare in the Earth's crust, but its extraction and purification are challenging. A fact about rhodium is that it’s highly chemically inert, which means it does not readily react with other elements or compounds. So, it is desirable in electroplating, but it also brings big difficulty in making the separation of it from its ore and impurities.

South Africa and Russia's geopolitical climate play a role in the scarcity of rhodium, which adds to its worth. For example, Russia has enforced regulations on the export of PGMs, diminishing the global supply of rhodium and resulting in amplified prices.

With its corrosion-resistant properties and radiant sheen, rhodium is utilized in a variety of applications. It is frequently electroplated, forming sturdy and reflective layers, which render it ideal for coating the surfaces of other metals. Its exceptional reflectiveness can be observed when it's evaporated onto glass surfaces, resulting in a thin layer that scatters light brilliantly. This technique is seen frequently in the camera and silverware manufacturing industries.

However, pure rhodium jewelry is a scarce find due to its challenging nature to work with because of its high melting point. Nevertheless, some auctions may highlight rhodium jewelry pieces that have undergone exquisite craftsmanship and come with a surprisingly high price tag.

Another reason it's expensive is because of the environmental protection. We know that nitrogen oxide emissions from automobiles have been a major environmental concern around the globe. Rhodium has been vital in curbing these emissions as it's used in three-way catalytic converters that convert nitrogen oxides to nitrogen and oxygen while transforming methanol into acetic acid. As environmental issues were emphasized more, new emission standards were also introduced, such as the Euro 6 emission standards adopted by China, Europe, India, and the United States, which are more focused on controlling nitrogen dioxide emissions. Consequently, the automotive industry relies heavily on rhodium to reduce harmful pollutants emitted by automobiles. With the demand for rhodium steadily increasing, its cost has also gone up.

In summary

Why is rhodium so expensive? Rhodium is an extremely rare and valuable precious metal primarily used in the automotive industry for its unique emissions-reducing properties. The scarcity of rhodium, industrial demand, and geopolitical factors in its production regions contribute to its high price. Looking at it from the other side, investing in this metal also is quite worthy for investors due to its scarcity, high price, and ongoing demand in the automotive industry.