NORTHAM Platinum increased platinum group metals (PGMs) production 10% in its 2024 financial year amid a pause in its growth projects.
Commenting in a production update, the South African PGM miner said total refined ounces including by-product metals such as gold, as well as third party purchases of metal, totalled 1.03 million oz for the 12 months ended.
This is the first time Northam has moved through one million oz in annual production.
In March Northam curtailed, deferred and paused certain capital projects. These included Zondereinde’s Western Extension and the development of declines at the Booysendal. At its Eland mine, development of decline systems had been temporarily paused.
The miner said today the current downturn in the PGM market “may endure for some time”, adding that it remained “fully internally focussed” meaning it did not foresee any opportunities for merger or acquisition activity in the sector.
Total refined production, excluding third party purchases was 892,876 oz for the 12 months, a year-on-year increase of 10.3%.
Total refined metal increased 5.3% to 891,721 oz for the year while refined metal sales increased eight percent year-on-year to just under 900,000 oz.
“Industry challenges remain, particularly in respect of metal prices and mining inflation,” the company said. “However, the combined effect of ongoing and consistent growth in production volumes and increased operational diversification, continues to underpin our defensive position and resilience in the face of the current soft metal price environment.”
PGM miners Anglo American Platinum, Impala Platinum and Sibanye-Stillwater have announced plans to cut costs and restructure operations, but there’s a question mark over the extent of the production cuts.
“As things stand, there have not yet been any major changes to guidance,” said Ed Sterck, director of research at the World Platinum Investment Council.
Based on data supplied to the council from Metals Focus, a UK based consultancy, annual refined production from mining year-on-year (as of March) is down “only 105,000 oz on a global basis”, he said.
There is though a much larger forecast 299,000 oz decline in supply from recycling globally – about 16% – over the same period. “The downward revision to recycling is a more significant factor,” said Sterck.
But the primary mining cuts that have been announced could end up being much higher – by three times in fact, said Wilma Swarts, director of PGM research at Metals Focus. “From our assessment, the rapid decline in spot prices and the current and anticipated cost cutting measures are not fully reflected in the mine plans,” said Swarts.
PGM prices appeared to have stabilised in recent months and even improved slightly, including palladium where lease rates have also tightened, according to research by RMB Morgan Stanley published last week. But the market remains depressed generally.
Said Northam Paul Dunne earlier this year: “We anticipate the depressed pricing environment will continue over the next 12 to 24 months, placing significant pressure on earnings and cash generation across the PGM mining sector”.
