Craig Miller

YOU can’t fault Craig Miller’s healthy optimism when in his first week as CEO he made the error of telling this correspondent that platinum group metal (PGM) prices would rebound, possibly by between 15% and 20%. Alas, he – and most of the industry – were placing too much confidence in the metals’ resilience. Yes, the world needs PGMs but inventories built by automakers during the Covid pandemic, and a semi-conductor shortage, have proved harder to overcome than expected.

While the signals are for a modest to moderate recovery of the PGM basket price this year, Amplats is battening down the hatches. Amid market speculation in December its parent company Anglo American discussed cutting jobs with the South African government, Amplats announced plans to slash expenses by R10bn, divided equally between operating costs and stay-in-business capital. Projects to debottleneck concentrate and refining processes were shelved; so too a third concentrator at Mogalakwena mine. The outcome is a cut in refined production over the next three years to three to 3.4 million ounces in 2025 and 2026 from 3.3 to 3.7 million oz this year. So what is in store for Miller this year? He will be judged on proving Amplats’ technical competence by meeting new cost targets, that’s for sure.

But a lift from the market will certainly help his cause. The adoption of electric vehicles is the key existential threat all PGM producers fear. Amid a slowdown in EV take-up last year, the question now is the extent to which these vehicles will eat into the market for internal combustion engines which PGMs supply. Miller thinks PGM demand will be supported for longer than expected as consumers opt for hybrid vehicles.