Russian PGM production to hit 4.3m oz by 2015

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Analysts note rise in use of metal for jewellery manufacture.

Russia has been named the second largest producer of platinum and the largest producer of palladium globally, according to analysis by Frost & Sullivan.

Findings show that the Russian platinum group metals (PGM) market, which includes platinum and palladium, produced 3.5 million ounces in 2010 and is estimated to reach to 4.3 million ounces in 2015. It is second only in terms of platinum production to South Africa.

In 2010 Russia produced about 825,000 oounces of platinum, according to figures from Johnson Matthey.

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Monika Nowotnik, Frost & Sullivan research analyst said: "The increased usage of PGM in a range of industrial applications, as well as the growing popularity of PGM as hedge assets during times of volatile currencies and insecure equity markets, is driving the market."

Nowotnik added that Russia has been following global trends and domestic consumption is anticipated to rise, especially in jewellery design and manufacture.

The research by Frost & Sullivan described how geological exploration in Russia has become more intensive in recent years. This has had an effect on the natural environment around the mining sites, in particular in the Norilsk-Talanakh region where almost 95.2% of Russian PGM reserves are concentrated and produced. However Russian regulations have followed European trends, becoming stricter in terms of environmental protection and limitation of noxious gases emissions.  

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