PGM bumper profits tipped by SA’s PIC to continue “for some time”

SOUTH Africa’s Public Investment Corporation (PIC) expected bumper profits from the country’s platinum group metal (PGM) companies to keep rolling owing to tighter emissions rules, said Bloomberg News.

“The cycle should continue for some time,” Mdu Bhulose, the PIC’s portfolio manager for mining and resources, told the newswire. “The supply and demand dynamics are quite solid and they are talking to a tightening market which should be supportive of prices.”

The PIC had invested more than R110bn in PGM miners such as Sibanye-Stillwater, Anglo American Platinum, and Impala Platinum, said Bloomberg News.

The dearth of investment in new mining projects over the past decade means supply deficits will persist, Bhulose said. Still, the longer-term threat to demand posed by electric vehicles, means miners must remain wary of expansion, he said.

“As much as we can see tightening in the supply-demand dynamics, you also don’t want people to needlessly spend money or take their eye off the ball,” Bhulose said.

Paul Dunne, CEO of Northam Platinum, told investors at the firm’s March 19 interim results presentation that the PGM market was heading for “… potentially the best decade ever”.

“We will double production by the middle of the decade,” said Dunne of plans to take annual production of PGMs to about one million ounces. “We are also considering our next phase of growth … I think we can look forward to improved returns”.