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JOHANNESBURG, March 10 (Reuters) - South Africa's Sibanye-Stillwater said on Tuesday along with Impala Platinum (Implats) it had partnered chemical company BASF to develop a new tri-metal auto catalyst allowing the partial substitution of palladium with platinum.
The research by BASF, which was funded by Sibanye and Implats, had successfully developed and tested the catalyst that would enable higher-priced palladium to be partially replaced with lower-priced platinum in light-duty gasoline vehicles.
Prices of palladium and rhodium, widely used in vehicle exhausts to reduce harmful emissions, have climbed as tighter environmental regulations force carmakers to buy more of the precious metals for catalytic converters.
Platinum has however remained in a surplus amid shrinking demand, particularly since Volkswagen's "dieselgate" scandal in 2015 which saw platinum prices plunge. Demand for platinum, used in the catalytic converters on vehicles with diesel engines, has been depressed since the scandal.
This has worried platinum miners particularly in South Africa which is the world's top platinum-producing country, as the three metals are mined together from the same ore.
The World Platinum Investment Council (WPIC) said in its latest quarterly report last week the platinum surplus would rise to 119,000 ounces in 2020 from 65,000 ounces last year.
"We are proud to have contributed to a solution which will normalize longer-term demand with supply and benefit all members of the value chain from miners, to refiners, fabricators and OEMs," said Implats CEO Nico Muller.
Testing of the new catalytic converter has shown it has met emission standards but it would still take some time before it would be widely adopted by the motor companies, Sibanye spokesman James Wellsted said. (Reporting by Tanisha Heiberg; editing by Jason Neely and David Evans)