Steve Phiri

Steve Phiri will almost certainly fall under some pressure to adjust Royal Bafokeng Platinum’s (RBPlat’s) dividend policy this year, especially as its near-R11bn Styldrift project eventually moved into cash in 2020, assisted greatly by surging rhodium and palladium prices. If there is pressure though, we don’t expect Phiri to be anything but his taciturn self. Phiri tended to leave questions regarding the firm’s unpopular 10% cash dividend policy to his CFO, Hanré Roussouw who did most of the talking. Quite where RBPlat would be without strong platinum group metal (PGM) pricing is, quite frankly, anyone’s guess.

The company lost about 45 days’ worth of production owing to South Africa’s Covid-19 national lockdown forcing it to defer R400m in capital expenditure as a result. It then suffered the double whammy moment when Anglo American Platinum announced a force majeure following incidents at both units of its Rustenburg based Anglo Converter Plant (ACP). The ACP treats all of RBPlat’s concentrate under contract. According to Phiri new payment terms were negotiated with RBPlat receiving a significant majority of the related proceeds during 2020 with the outstanding payments being settled in full before 30 April 2021. Despite these setbacks, RBPlat still returned superb interim results for the six months to end-June. Phiri kept a poker-face on the payout though.

The much-expected recovery in platinum could be “slow and uneven” he said, although we suspect the draining effect of building Styldrift has had a major bearing on Phiri’s risk outlook.