There is no doubt the surge in rhodium and palladium prices has covered a multitude of problems in SA’s platinum group metals (PGMs) sector that have been unveiled so far.
The operational performances of Anglo American Platinum and smaller peer Royal Bafokeng Platinum (RBPlat) both showed the negative consequences of the lockdown of SA’s economy at the end of March.
Amplats had the added problem of a failed set of converter plants that stopped the refining of PGMs in its tracks. RBPlat, which has two underground mines, lost 45 days of production to the lockdown.
But the performance of metals prices, most notably rhodium and palladium, have put a large and comfortable plaster over the difficulties in the three months to end-June, when all mining operations were allowed to return to full capacity under strict health and safety practices.
Rhodium and palladium are primarily used in antipollution devices in petrol engines, with platinum used along with rhodium in diesel engines. Palladium and rhodium are now by far the biggest contributors to PGM companies’ revenue.
SA dominates rhodium supply — 621,000oz out of global supply of 746,000oz — so any disruptions would underpin prices and concerns about deficits in the market.
There are three more big PGM miners to report and the market will expect similar cash-flushed financials from Impala Platinum, Northam Platinum and Sibanye-Stillwater.
Implats has mines and processing plants in Zimbabwe, but it couldn’t move material into SA for refining. That, however, will be unlocked in time.
The true one to watch is Sibanye, which not only has PGMs but gold mines as well. Sibanye has the uninterrupted flow of palladium and platinum as its Stillwater assets in Montana, which will no doubt show the full benefits of continued metals sale.
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