Chrome and platinum group metals (PGMs) miner Tharisa delivered a bumper profit in its 2022 financial year and this looks set to continue in the new year as it delivered a record output in October.
The company, valued at R6.8bn on the JSE, reported on Monday in its annual results to end-September that its net profit after tax rose 35.6% year on year to R2.6bn, operating profit rose 10.1% to R2.9bn and core earnings 12.9% to R3.8bn.
“The 2022 financial year has provided not only record production of the metals that we mine but also the consolidation of the foundations of the next stage of our growth for the coming decade and beyond,” CEO Phoevos Pouroulis said in the results.
Tharisa, which is listed on the JSE and London Stock Exchange, operates a single mine in SA near Brits in the North West. The mechanised mine has a 19-year open-pit life and the ability to extend operations underground by at least another four decades.
It also owns Karo Mining and Salene Chrome, which are development-stage, low-cost open-pit PGM and chrome assets in Zimbabwe.
The company wants to cash in on the move to renewable energy as countries and companies try to cut down on their carbon emissions to combat climate change.
PGMs are expected to underpin the future of the hydrogen economy, which forms part of the greater shift to green alternatives.
“The unique properties of PGMs, which underpin the long-term demand for the metals, are contrasted against a reduced and disciplined producer supply of new ounces into the market,” it said.
Platinum, iridium and ruthenium, which Tharisa produces, are used in electrolysis to split water into hydrogen and oxygen, while PGMs also go into producing the fuel cells of electric-vehicle engines.
“PGMs are by nature the best catalysts on the periodic table, so we don’t think we have even found the best applications for PGMs yet,” Pouroulis told Business Day.
He believes SA will ultimately be one of the biggest beneficiaries as the world’s largest platinum supplier, “so it’s a good place to be in”.
Large amounts of money are being invested in the move to green, including the Just Energy Transition Partnership (JETP) through which the UK, US, France, Germany and the EU have committed to mobilise $8.5bn to support SA’s transition to a low-carbon economy.
Aiding the switch was President Cyril Ramaphosa’s announcement in July that as part of efforts to address the problems at state power utility Eskom, the state is fast-tracking its renewable energy procurement processes to keep the lights on.
Tharisa’s results were also lifted by the strong commodity market and the rand weakening to the dollar. This comes despite the average basket price of PGMs retreating 16.6% during the year to $2,564/oz. However, the average price remains 50.5% higher than in its 2020 financial year.
Chrome prices and sales improved, with Tharisa increasing output by 5.11% to 1.6-million tonnes. The average price received was up by more than one-third to $209 per tonne. Overall revenue jumped 22.7% to R10.9bn, while it lowered its dividend 22.2% to $0.07 (R1.21).
Its production guidance for its 2023 year is 175koz and 185koz for PGMs and 1.75-1.85-million tonnes for chrome concentrates.
Update: December 5 2022
This story has been updated with new information.
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