Tharisa keeps production tiller steady in Q1 whilst rhodium price rockets through $18,000/oz

THARISA today reported first quarter increases in chrome and platinum group metal (PGM) production year-on-year keeping it on track to reach full-year guidance for its 2021 financial year which ends in September.

PGM production totalled 39,300 ounces, an increase of 14.2% over first quarter production last year and a shade lower than fourth quarter production of 40,500 oz. Chrome production came in at 372,300 tons, 8.7% higher than in the 2020 first quarter. Speciality grade chrome production was 15% higher at some 93,800 tons.

Production guidance for this year is between 155,000 and 165,000 oz PGMs and between 1.45 to 1.55 million tons of chrome concentrate. The risk of interruption owing to Covid-19 restrictions remains ever-present, however. Tharisa lost its second employee to the disease and recorded 35 active cases on its premises near Rustenburg in the North West province.

“The headwinds from the global Covid-19 pandemic continue to challenge the industry worldwide,” said Phoevos Pouroulis, CEO of Tharisa.

The pandemic, however, has not dented metal pricing following China’s recovery mid-2020. The average PGM basket price during the first quarter of $2,399/oz was 23% higher than in the fourth quarter and an advance on a year ago.

Rhodium pricing is the notable number: at an average price of $18,840/oz, the metal is $14,000/oz higher than just over two years ago.

Commenting on the rhodium price in October when it moved through $13,000/oz, Pouroulis said it and the palladium price would ensure “… Tharisa has an excellent financial and operating platform to progress the business through its next phase of growth”.

That growth turns largely keeping production uninterrupted and completing the expansion of its processing facilities via the Vulcan Project which will take production to 200,000 PGM oz and about two million tons of chrome concentrate.

Pouroulis said the project remained “on track” ahead of a “production boost” in the firm’s 2022 financial year.

The average metallurgical grade chrome price was $136/t for the first quarter compared to $145/t a year ago and $142/t in the fourth quarter. The current market price, however, is $145 to $150/t, the company said.

Of revenue generated in Tharisa’s 2020 financial year, about two-thirds was from PGMs. Of this, 51% was provided by rhodium followed by platinum (25%) and palladium (19%). The gross profit margin on PGMs was 39.4% compared to 25% for chrome concentrate.

Tharisa announced earlier that it had concluded a four-year wage deal with its main unions represented at the Tharisa Mine, effective from July 2020 until 30 June 2024.

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