The Public Investment Corporation (PIC) has increased its stake in Northam Platinum to a commanding 20%, as the asset manager continues to back the long-term prospects of platinum group metals (PGMs).
PIC’s move follows a similar one last year when it increased its stake in Sibanye-Stillwater to 15%. Northam, worth R44.3bn on the JSE, has been attracting investors in the past six months.
In October, asset manager Coronation revised its stance on the business case for PGMs, acquiring a 5% stake in Northam, just a year after announcing its decision to disinvest from an industry plagued by low prices and decreasing demand.
PIC CIO Kabelo Rikhotso last year backed PGMs to play a big role in the green economy, particularly in the hydrogen economy.
SA accounts for more than 50% of the world’s platinum production and houses its largest reserves, primarily in the Bushveld Complex. The PGM sector is also the largest employer in SA’s mining sector.
Six metals that are chemically, physically and anatomically similar comprise the PGMs: platinum, palladium, rhodium, ruthenium, osmium and iridium.
The PGM market has endured a tough two years, with prices coming under pressure as demand for PGMs, used mostly for internal-combustion engines, has come under pressure due to the rise in popularity of battery electric vehicles.
SA PGM miners have responded by cutting costs, with about 10,000 jobs lost in the industry over the past year.
However, the recent tapering in growth of electric vehicle (EV) sales and a surge in demand for hybrid cars, which need catalytic converters to curb pollution, have given PGMs a new lease of life.
Longevity
Sibanye-Stillwater in April said its view was that PGMs have substantial longevity in automotive applications, especially through the emergence of hybrid vehicles.
The developing hydrogen economy is also likely to support demand for PGMs in future, with the European Commission having recently announced about €7bn in funding for more than 30 hydrogen projects.
Platinum is used in hydrogen electrolysers, which are key in deriving hydrogen’s zero-emission applications, by using the proton exchange membrane process.
Anglo American boss Duncan Wanblad said at the Joburg Junior Mining Indaba held in October that battery EVs were not the nirvana that some would have one believe, and hybrid vehicles were expected to become the more realistic option in many markets, considering that hybrid cars generally have higher PGM loadings than those with internal-combustion engines.
The PIC played a central role in a multibillion-rand deal that saw Impala Platinum (Implats) in 2023 gain a controlling share of Royal Bafokeng Platinum, after it sold the latter its 9.26% shareholding in the company.
Northam was also bidding to take control of Royal Bafokeng — but pulled out after a protracted battle with Implats.
Pepkor stake
The PIC, the largest investor on the JSE on Monday also increased its stake in Pepkor to 15% — a strategic move in a company worth R101bn on the JSE.
Pepkor Holdings in November reported a return to profitability for the financial year ended September, driven by growth in the retail and financial technology segments.
Owned by popular clothing brands PEP and Ackermans, the group posted a profit before tax of R3.7bn, after a restated loss of R502m recorded in the previous financial year. Profit for the year improved to R2.08bn after a R1.29bn loss a year ago.
Total group revenue increased by 7.8% to R85.1bn. The clothing and general merchandise division contributed R61.4bn, reflecting 5.2% growth, while the furniture, appliances and electronics division posted a 4.5% rise, reaching R11bn.
Pepkor plans to open 250 to 300 new stores in 2025 with the expectation that consumer spending power would improve as food prices ease and electricity supply stabilises.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.