According to Frost and Sullivan, Russia is the second largest manufacturer of platinum group metals (PGM), the largest producer of palladium in the country behind over 30% of all PGM exported globally in 2010.

Although experts define Russia’s PGM market as “mature,” and although environmental regulations will inevitably stall the possibility to rapidly develop the mining of these metals, market analysts aren’t exactly steering investors away from the Russian PGM market. In fact, the environmental regulations modeled after those of Europe are likely to increase innovative means for mining at the same time the introduction of smaller competitors emerge.

Platinum group metals were first encountered in Columbia, according to the U.S. Geological Survey (USGS), and are transition metals that lie within the d-block of the periodic table. Russia is the largest producer of palladium, one of the six PGM’s.

In pre-Columbian times PGMs were considered impure additives to silver, but times have changed. PGM’s have “outstanding catalytic properties” and are used for many industrial purposes ranging from jewelry to electronics. “The growing popularity of PGM as hedge assets during times of volatile currencies and insecure equity markets, is driving the market,” said Monika Nowotnik of Frost and Sullivan.

“Stricter environmental regulations are likely to hamper the rapid development of mining areas,” she said, explaining how stricter environmental regulations will add to the growth of the PGM market. “On the other hand, these regulations can enhance the development of modern technologies, such as catalytic converters and fuel cells. These technologies can leverage the catalytic properties and resistance of platinum and palladium to decrease emissions of noxious gases and increase the durability of various goods.

Added Nowotnik: “These changes are a strong incentive to increase PGM consumption in Russia. International companies are already investing in autocatalyst production in Russia, as the Russian market has become increasingly popular among car assemblers and manufacturers due to the large domestic market and relatively low costs of production.”

According to Stock Market Notes, Anglo Platinum is the largest provider of PGMs due to their reserves in the Bushveld Complex in South Africa, where there is a deposit of 75-90% of all PGM’s in the world.

But the large amounts of PGM stashed in this corner of the world are not going to stop Russia from introducing new competitors to their existing market. CJSC Fedorovo Resources is a company that explores the development of PGM along with other minerals like gold, copper, and nickel. The report stated CJSC is currently waiting for governmental permission to mine and extract the metals, and hopes to be a fixture in the market by 2013.