Iridium as a Catalyst: A Hot Investment in Chemical Innovation?

The catalytic properties of iridium are revolutionizing various industries, and with demand projected to surge to 34 tons by 2040, is now the time to invest in this precious metal?

Iridium, a member of the platinum group metals (PGMs), is experiencing a surge in demand due to its unique catalytic properties and increasing applications in various industries. Its exceptional corrosion resistance, high melting point, and ability to withstand extreme conditions make it indispensable in processes such as hydrogenation, dehydrogenation, and polymerization. As industries strive for more sustainable and efficient chemical processes, iridium-based catalysts are gaining significant traction. But is this increased demand a signal for investors?

Iridium: The Basics

Iridium (Ir) is a hard, silvery-white metal that is one of the densest elements on Earth. Discovered in 1803, it’s known for its inertness and resistance to corrosion, even at high temperatures. These properties make it valuable in specialized applications where durability and reliability are paramount.

The Catalytic Power of Iridium

Iridium’s primary allure lies in its catalytic capabilities. A catalyst is a substance that speeds up a chemical reaction without being consumed in the process. Iridium catalysts are used in a wide array of chemical reactions, including:

Hydrogenation: Adding hydrogen to unsaturated compounds. Iridium catalysts are highly selective, adding hydrogen atoms to specific parts of a molecule without affecting other parts.
**Hydroformylation: Adding a carbonyl group to an unsaturated hydrocarbon.
Dehydrogenation: Removing hydrogen atoms from a molecule.
C-H Activation: Iridium catalysts facilitate the direct functionalization of C-H bonds in organic molecules.
Water Oxidation: Iridium catalysts are effective in mediating water oxidation reactions, crucial for renewable energy production.

These reactions are vital in producing various chemicals, including pharmaceuticals, polymers, and fuels.

Key Applications Driving Iridium Demand

Several sectors are contributing to the rising demand for iridium:

PEM Electrolysis for Green Hydrogen Production: The most prominent and fastest-growing use of iridium is in proton exchange membrane (PEM) water electrolyzers. Iridium serves as the preferred catalyst on the oxygen evolution reaction (OER) side due to its resistance to oxidative degradation under strongly acidic and high-voltage conditions. With PEM electrolysis expected to dominate green hydrogen production, demand for iridium is forecast to rise steeply. For every gigawatt of PEM electrolyzer capacity, around 400 kg of iridium is currently required.
Chemical Industry: Iridium catalysts are used in producing various chemicals, including acetic acid, automotive exhaust purification, and unsaturated hydrocarbon compound hydrogenation.
Electronics: Iridium is used in electronic components like spark plugs, crucibles, and electrodes due to its high melting point and corrosion resistance.
Aerospace: Iridium is used in aerospace applications, such as aircraft turbine engine components, due to its high-temperature resistance.
Medical: Iridium isotopes are used in medical devices like brachytherapy for cancer treatment.

The Supply Challenge

Iridium’s supply is extremely limited and geographically concentrated. Over 95% of global primary production originates as a by-product of platinum and nickel mining in South Africa and Russia. This limited supply makes iridium’s price inelastic and largely unresponsive to changes in demand. The German raw materials agency, DERA, anticipates that by 2040, the demand for iridium could escalate to a staggering 34 tons. However, given the intricate extraction process, a substantial increase in production seems unlikely.

Investment Considerations

Investing in iridium presents both opportunities and risks:

Price Volatility: Iridium prices are subject to extreme volatility due to its limited supply and increasing demand. In 2021, iridium prices more than tripled.
Supply Disruptions: Geopolitical tensions and mining challenges in major producing regions can lead to supply disruptions, causing price spikes. The Russia-Ukraine conflict has already impacted the prices of PGMs, including iridium.
Substitution Risk: While iridium is currently irreplaceable in many applications, research is ongoing to find alternative catalysts using more abundant and cheaper materials. The automotive and electronics sectors are reportedly already substituting some iridium.
Recycling Potential: Efforts to stabilize and secure iridium supply depend on coordinated action across industry and government. Investment in recycling infrastructure and advanced refining technologies will be essential to offset production inelasticity.

Mitigating the Risks

Several strategies can help mitigate the risks associated with iridium investment:

Diversification: Don’t put all your eggs in one basket. Diversify your investment portfolio across different asset classes.
Long-Term Perspective: Iridium investment is best suited for investors with a long-term outlook, as the market is expected to grow significantly in the coming years.
Stay Informed: Keep abreast of the latest developments in the iridium market, including supply and demand dynamics, technological advancements, and geopolitical events.
Consider Recycling: Support companies involved in iridium recycling, as this can help alleviate supply constraints and reduce environmental impact. McCol Metals’ output of iridium (as iridium oxide) has a footprint of 24.5 kilograms of carbon dioxide equivalent (kg CO2e) as compared with mined and refined iridium, which has a footprint of 78,559 kg CO2e. This is a 99.97 percent reduction of greenhouse gasses.

The Role of Innovation

Innovation plays a crucial role in addressing the challenges associated with iridium supply and demand. Companies are developing new catalysts that require less iridium or use alternative materials. For example, 3M has developed a nanostructured-supported iridium catalyst powder that reduces the amount of iridium needed for electrolysis. New Iridium, a sustainable chemical innovation company, is pioneering low-carbon and clean chemistry technologies to transform carbon dioxide from a climate liability into a valuable industrial resource.

Iridium Recycling

Given the limited supply of iridium, recycling is becoming increasingly important. Iridium catalyst scrap can be found in the chemical industry, electronic equipment, aerospace industry, and other industrial uses. Recycling these wastes is of great significance for resource conservation, environmental protection, and corporate economic benefits. “Dry aqua regia” utilizes a molten salt containing iron(III) chloride and potassium chloride. In this process, iridium dissolves in the molten salt and is subsequently recovered using ammonium chloride, nitric acid, or hydrogen peroxide for precipitation.

Conclusion

Iridium, as a catalyst, is undoubtedly a hot topic in chemical innovation. Its unique properties make it essential for various industries, particularly in the burgeoning green hydrogen sector. While the limited supply and price volatility pose challenges, the long-term demand outlook remains strong. Investors who carefully consider the risks and opportunities, stay informed, and adopt a long-term perspective may find iridium to be a valuable addition to their portfolio.

Considering investing in precious metals? Contact us today for a consultation and explore how iridium and other PGMs can fit into your investment strategy.