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. Last Updated: 07/27/2016

Palladium Fever Seizes Georgian Town

RUSTAVI, Georgia — With its crumbling prefabs and legions of unemployed workers, the industrial center of Rustavi in the Caucasus Mountains resembles hundreds of other washed-up factory towns in the former Soviet Union.

But these days, there's hope in the air, noticeable ever since mysterious visitors with a bulldozer unearthed a cache of palladium in an old dump outside the Georgian town of Rustavi last month. The silvery metal, related to platinum, is more valuable than gold, and its discovery has brought a stampede of fortune seekers armed with shovels and hoes.

"People have gotten a chance to work, and now they work without putting their hands down," said Zurab Gotsadze, the local environmental official who gave the go-ahead for the prospecting.

It's a small but needed piece of global business for Rustavi.

Beset by tight supplies, world prices for pure palladium have skyrocketed the last four years on metals markets. Scavengers can make a quick $1,000 mining the Georgian dump — not bad in a nation where pay averages $50 a month.

They sell their finds to middlemen from the former Soviet bloc and elsewhere, who in turn peddle to German and other Western refineries for eventual use in car catalytic converters, dental equipment and consumer electronics such as televisions and computers.

The business is a rare bright patch in an economically depressed city where unemployment stands at 50 percent, its big factories idle because of a lack of orders from former Soviet customers.

The Azut Fertilizer plant dumped an unknown number of small, metallic pellets — each less than 1.30 centimeters long and containing very thin wafers of palladium — in a ditch in the 1980s.

In pure form, the metal is used in tiny quantities as a catalyst in the making of fertilizer and in other chemical processes.

Its biggest use is in catalytic converters in car exhaust pipes. At about $800 an ounce on metals markets — more than three times gold's value — palladium can add $80 to the cost of a car.

It isn't clear how much palladium is buried in Rustavi. The plant itself closed in the mid-1990s, amid the general collapse of former Soviet industry in Georgia.

It's a mystery who first struck on the idea of digging up the palladium, but whoever it was came at night Feb. 7 and lifted the concrete planks that had covered the dump with a bulldozer. They dug up a large amount of palladium-containing filters from the plant and carried them away in a truck, local residents said.

The very next day, some more visitors came from Adzharia, the Georgian region bordering Turkey, and they offered the equivalent of $225 to $240 for every kilogram of filters.

The same weight brings $500 in Batumi, the capital of Adzharia, noted Boris Gobedzhishvili, a 48-year-old unemployed engineer. It fetches even more in Turkey and "in Germany people make capital out of it," he said.

Gobedzhishvili said he found and sold almost 4 kilograms of cylinders in one week, and made $1,000, a huge sum by local standards. "The family has relaxed. I hope to get lucky again," he said.

Diggers have carved a pit about nine feet deep and the size of a football field at the site on the outskirts of Rustavi, 60 kilometers west of Georgia's capital, Tbilisi.

"They are calling it the Klondike," said Gotsadze.