The two main sources of supply are mine production and secondary recovery.

Total palladium supply in 2008 was 8,100,000 ounces, a decline of 4% from 2007 levels.  This decline was largely driven by the reduction in South African palladium output.
During 2009, refined palladium supply is forecast to stand at 7.5 million ounces.  This is a decline of 6.7% from 2008 levels and is the lowest level of supply since 2003.

Mine Production
Unlike gold and silver markets, PGMs are mined in a few select countries, primarily South Africa and Russia, and by a limited number of producers.  North America and Zimbabwe are also contributors. In Canada most PGMs are mined as a byproduct of nickel and copper with the exception of North American Palladium’s Lac des Iles mine which has been in operation since 1993, both as an open pit and underground mine operation.  (Operations were continuous until October 2008 when the Company decided to temporarily shut down the mine due to low metal prices.)

Russia is the largest producer of palladium in the world and the second largest platinum producer.  Almost all its PGMs are produced by Norilsk Nickel which also produces large amounts of copper, nickel, cobalt and other commodities.  Until the mid-2000’s, actual levels were state secrets.  New government regulations now allow Norilsk and other domestic PGM producers to release information on production, reserves, inventories and other data.  This has allowed for greater transparency and reliability of estimates.

Secondary Recovery
Secondary recovery of palladium comes from two major sources:  auto catalysts and electronics.  Secondary recovery of the metal stood at approximately 1.6 million ounces during 2008, up 7% from 2007 levels.  Palladium recovery from the auto catalyst sector is expected to decline sharply during 2009. 

On a global basis, total palladium usage in auto catalysts rose at a compounded annual growth rate of approximately 16% between 1995 and 2000.

2008 Palladium Supply (million ozs)	Palladium Supply by Region Total in 2008: 8.1 million ozs
Mine production 6.5 Secondary supply 1.6 Total 2008 8.1 *Source:  CPM Group, PGM yearbook 2009