Despite rally, platinum prices insufficient for mining sustainability
Northam Platinum CEO Paul Dunne says that the recent platinum price rally has brought relief to South African miners, but it is still below levels needed to support new production. This, as Northam reports a 14.4% drop in annual profit, as mining costs surged, despite record sales volumes. It made headline earnings per share of R3.81 in the year ended 30 June, compared with R4.45 a year earlier.
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Platinum miners' earnings have been hit by low metal prices since early 2023, mainly due to weak demand from the automotive sector and an outlook dimmed by the increased electrification of transport.
Platinum group metals are primarily used in autocatalysts that help curb harmful emissions in fossil fuel-powered vehicles.
In response, South African miners, which account for more than 70% of global platinum supply, cut loss-making production and halted projects.
However, platinum prices have rallied recently, rising 36% in the second quarter of 2025 on the back of Chinese imports and declining supply from South Africa.
"Recent price appreciation is offering some relief to the PGM sector," Dunne said in a statement.
"However, it is still not yet at levels that will support sustainable mining across the industry and certainly not the much-needed development of new operations," he added.
Dunne said tight PGM supply conditions were likely to persist in the medium term, with new demand seen for minor PGM ruthenium being driven by data storage, among other applications.
Northam said in its results statement that many South African platinum mines were under-capitalised and had short remaining mine life, resulting in shrinking primary PGM supply.
"In 2008, 81 PGM shafts were in operation in South Africa. Currently, there are only 53, and this number is expected to continue to fall," Northam said.
Impala Platinum CEO Nico Muller also warned against "flooding the market with new ounces", as the sector still faces a major threat despite the slower-than-projected adoption of electric vehicles.