As if the petroleum and petrochemical industries don't already have enough to worry about, your company now has a full turnaround of a unit containing precious metals catalyst coming up and you have all these things to contend with as well:
- Metals price volatility.
- Owning versus leasing.
- Insurance and liability.
- Environmental concerns.
- The complexity of international shipping.
- Lengthy payment terms.
- Complicated contracts.
Many responsible parties around the world believe the first decision to be made is whether it would be best to send the catalyst to a precious metals refiner or simply sell it outright by the kilo. When you get past the "fake news," refining is the only smart choice.
The problem usually begins when people assume they could sell the catalyst by the kilo to a broker to "save money" or "save the trouble" of international shipping, etc. This is a huge risk, as brokers are only offering 50-60 percent of the platinum group metal value at best. Refining, even including international shipping and all costs, still returns a net average over 90 percent on petroleum catalysts' true precious metals value.
One metric ton of platinum catalyst (2,205 pounds) is about $75,000, so that means selling to a broker by the kilo is equivalent to losing between $30,000- $37,500 on every metric ton you sell. In addition, many countries enforce a "grandfather clause" regarding the liability of a corporation indefinitely into the future. The bottom line: If you sell your catalyst to a company that disposes of it improperly, your company may remain responsible for the pollution fines, cleanup, lawsuits, etc.
Advantages of refining
- Net return after all costs typically over 90 percent of precious metals value contained.
- Only requires lease or purchase of "makeup" ounces for replacement catalyst.
- With proper documentation and good standing, metal advance available.
- Zero liability: fully insured from point of Sabin's possession, with a certificate of destruction at the finish.
Disadvantages of direct sale
- Net return after all costs typically less than 60 percent of precious metals value contained.
- Assets sold at over 30-percent loss can trigger corruption investigation.
- Replacement catalyst now requires full new lease or purchase of platinum.
- Unending liability: uninsured transport and final treatment, with no traceability of proper environmental disposal.
The takeaway
Make sure your precious metals end up with a responsible recycler. Root out and eliminate the unethical and the wasteful, and forge global partnerships. Allow for fair margins, invest in research and development, discard perceived limitations and challenge what is "normal."
Sabin believes long-term wisdom and meaningful innovation are best for business, and as a result, they are what is best for society and all mankind.
For more information about this topic or other precious metal matters, visit www.sabinmetal.com.
