Tharisa delays Karo project 12 months as PGM prices retreat 26%

THARISA has delayed delivery of its $391m Karo platinum group metal (PGM) project in Zimbabwe by a year to June 2025 owing to the deterioration in prices.

Describing the decision as “measured”, Tharisa CEO Phoevos Pouroulis said in a fourth quarter and full year production update today the project’s revised timeline was “aligned to funding availability”. The project timeline could be accelerated again were prices to revive.

Pouroulis said the project, which on completion will take Tharisa’s PGM production to about 400,000 ounces annually, had “progressed well”.

PGM prices had fallen further than anticipated this year while the market for the precious metals remained uncertain and volatile. The average PGM basket price received in the fourth quarter was 21.5% lower at $1,331/oz. This had “accelerated” the annual price retreat of 26.1% with average prices received at $1,893/oz compared to an average price of $2,564/oz last year, Tharisa said.

Tharisa also announced modest guidance for PGM production for its 2024 financial year which at 145,000 to 155,000 oz is significantly down on guidance for this year, initially put at 175,000 to 185,000 oz. In April, Tharisa downgraded that guidance 10% following heavy rains which compounded a pre-existing waste removal difficulty related to the high levels of oxidised ore in the Tharisa open pit.

Earlier this year, the company installed a contractor to assist with waste removal. Pouroulis said today the contractor was now “firmly in place”, but he remained “cautious” on the firm’s production outlook.

Full year PGM production came in below adjusted guidance at some 144,700 ounces compared with 179,200 oz notwithstanding a recovery in the quarter.

Handily for Tharisa, production of chrome concentrate from the Tharisa mine was unchanged year-on-year at 1.58 million tons while prices for the mineral surged 26%.

“The divergence in commodity prices could not have been more visible than the past quarter which saw us touching 52-week highs in the chrome market based on solid fundamentals,” said Pouroulis.

Tharisa has guided to chrome production of 1.7 to 1.8Mt in chrome concentrate.

René Hochreiter, an analyst for Noah Capital said he was positive on the outlook for Tharisa as PGM prices – led by rhodium in the last week – were beginning to revive. “We therefore see Tharisa firing on both Cr (chromium) and PGM cylinders before long as both PGMs and chromite perform well beating guidance,” he said in a report.