Rare earth metals in catalytic converters spur recent thefts across city

Rhodium currently worth nearly $25K per ounce

Troy police are investigating the reported thefts of six catalytic converters in three recent incidents.

Catalytic converters attract thieves for the soughtafter platinum group metals they contain, including the extremely rare rhodium, priced at $23,900 an ounce, compared to gold’s price of $1,739 an ounce as of March 15, according to moneymetals.com.

The recent thefts in Troy, police said, happened sometime between Feb. 23 and Feb. 28 in the parking lot of Simple Suites, 2550 Troy Center Dr. The catalytic converter was stolen from a 2010 Ford Escape. Another incident happened sometime between Feb. 21 and Feb. 28 in the parking lot of Oak Park Rental, 2477 W. Maple Dr. The catalytic converter was stolen from the business’ 2007 Ford Econoline Van while it was parked outside the gated area.

The third incident happened sometime March 1 or March 2 at Continental Culinary Center’s parking lot, 700 Stephenson Highway. Catalytic converters were stolen from the business’ 2019 Ford Econoline van, two 2016 Ford Cutaway vans and a 2013 Ford Cutaway van. Another 2013 Ford Cutaway van had its exhaust pipe cut but the catalytic converter wasn’t removed, police

Why the high price?

Though national data is scarce, news reports point to thousands of catalytic converter thefts over the past year — tied to the high price of rhodium. Rhodium, a silvery-white chemical element, is a byproduct of the production of platinum and palladium, used to remove toxic pollutants from vehicle exhaust.

To understand why its price is so high, look back more than a decade to the 2008 global recession and follow its effects as they conceded with COVID-19’s pandemic-driven economic catastrophe in South Africa, where it’s believed 80 percent of the world’s rhodium originates.

Prior to the 2008 recession, South African mines were churning out platinum, a pillar of the country’s export economy that’s used in a variety of products from jewelry to heavy industry. Mining continued

into the downturn, creating a massive surplus of platinum that still exists. Because rhodium is a byproduct of platinum production, it’s only produced when mining companies see a profit in platinum — which they might not for another few years until the surplus wanes.

“There is a lot of metal in the system, which has kept prices quite low for a long time,” said James Wellsted, spokesman for Sibanye-Stillwater, the world’s largest platinum and rhodium producer. Even meteoric rhodium prices can’t justify significantly scaling up platinum production right now, he said.

Each unit of ore mined typically contains 60 percent platinum, 30 percent palladium, 8 percent to 9 percent rhodium and trace amounts of other metals, said Emma Townshend, an executive at Impala Platinum, another major South African platinum metals group producer.

Mining representatives said they expected rhodium shortages and the accompanying high prices to persist until at least 2025.

Part of the shortage is driven by the demand side, too. As some countries in Europe, the Americas and East Asia raise emissions standards, new vehicles are expected to require more rhodium in their exhaust filters. And in countries like China, demand for cars is soaring.

Lara Smith, founder of the mining market research group Core Consultants, said while rhodium shortages were in excess of 150,000 ounces, the deficit was expected to grow until a substitute was found or if there was a major switch to electric vehicles, which don’t require rhodium.

“There are certain metals that don’t follow fundamental supply and demand dynamics because nobody is going to set up a mine just for the rhodium,” she said. “Rhodium will always be mined or not mined because of the platinum.”

The shortage was only exacerbated by the pandemic. In South Africa, what little platinum mining remained was curtailed between April and November as the government figured out how to allow for mine activity without putting workers at risk. An explosion at a giant platinum mine last March also disrupted production.

These factors, together with the platinum surplus and surging demand, took what was already an expensive, rare metal and drove the price through the roof. The global automotive industry now spends tens of billions of dollars a year on the metals for catalytic converters alone.

“We call rhodium the most precious of all the metals. People are only taking note of it now, but really it has been the top-performing commodity for the last three or four years,” Wellsted said.

He said criminals who stole rhodium-containing catalytic converters usually sold them to a network of scrap merchants. Each converter generally contains about $400 worth of rhodium, he said, in addition to its numerous other components.

Each unit of ore mined typically contains 60 percent platinum, 30 percent palladium, 8 percent to 9 percent rhodium and trace amounts of other metals.