Chrome and platinum group metal (PGM) miner Tharisa reaped the benefits of higher commodity prices in the June quarter as countries rebuild economies battered by the Covid-19 pandemic and as the world pushes to environmentally friendly materials.
Tharisa, which is listed on the JSE and in London, on Friday reported record quarterly chrome concentrate output and ramped-up PGM production amid high demand for its commodities. PGMs are used to clean the emissions of internal combustion engines, while chrome is primarily used in the manufacture of stainless steel.
The average PGM basket price rose 15.6% from the preceding quarter to $3,804/oz in the three months to June, and a whopping 138.8% when measured on a year-on-year basis.
Tharisa’s production of PGMs, which primarily consist of platinum, palladium and rhodium, rose 8.9% to 39,000oz quarter on quarter and 11.4% from a year ago.
The company, which operates a single mine near Brits in the North West, said the outlook for the three metals is positive, given their big role in hydrogen fuel cells, which are effectively used to power vehicles and are an alternative to traditional petrol and diesel engines.
“We remain confident that the unique and flexible PGM metal properties will have a robust outlook, being evident in the demand for the precious metals in a number of growing diversified industries, while PGM production increases across the industry remain limited, therefore supporting stronger long-term prices,” the company said in a statement.
There is a shortage of rhodium globally as makers of petrol engines increase the content of the metal in their anti-pollution devices installed in exhaust systems, to meet stricter emissions regulations in Europe, North America and China.
Chrome concentrate production, excluding third parties, was up 5.9% to a record 379,700 tonnes in the June quarter, from the prior quarter, and 18% higher than a year ago.
Stainless steel producers drove the demand for ferrochrome, resulting in tighter supplies and subsequent increases in the price of ferrochrome.
At the end of the review period, Tharisa was in a net cash position of $41.8m (R590m), up $29.8m in the March quarter.
Tharisa kept its full-year production guidance unchanged, with PGM production at 165,000oz and up to 1.55-million tonnes of chrome concentrates.
The value of mining exports totalled R600bn in 2020, according to a recent note by HSBC, helping relieve pressure on SA’s finances via corporate income tax and mining royalties.
Shares in Tharisa closed 1.76% higher at R25.44 on Friday, valuing the company at about R7bn.
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