Northam Platinum withheld an interim dividend despite higher production, sales and profit, saying it remains at a “critical juncture” in expanding operations, including its Zondereinde and Eland mines over the next two years and an offer for Royal Bafokeng Platinum (RBPlat).
Earlier in March rival Impala Platinum (Implats) withdrew its objection to the increased cash component in Northam’s offer, tabled in December, to take control of RBPlat. The two mining companies have been slugging it out to gain majority control of RBPlat’s coveted ore body.
“The PGM [platinum group metal] industry has dramatically shrunk during the last decade. Multiple mines and mining shafts have closed, leaving only six producers globally, including RBPlat,” CEO Paul Dunne said on Friday in the results of the company for the six months to end-December.
Northam, valued at R60.84bn on the JSE, owns 34.52% of RBPlat and committed R17bn to increase its stake as it looks to expand in PGMs, which it believes will be crucial in the burgeoning hydrogen economy.
“We also understand the scarcity of high-quality, shallow, PGM resources, and the undercapitalisation of PGM assets for more than a decade, making the RBPlat assets rare, unique and very valuable,” the company said. “The supply of these metals is, however, constrained and will reduce over the coming decade due to a general lack of global mining investment since 2008.”
Still, Northam remains wary of geopolitical issues, including the war in Ukraine, that could disrupt the PGM market, while the energy crisis and issues at Eskom continue at home. The company has expanded on renewable backup power to minimise the impact of the state-owned utility’s power cuts.
Equivalent refined metal from Northam’s operations rose 11.9% to 393,309oz (111.5 tonnes) and to 468,331oz (13.3 tonnes) including RBPlat.
Sales jumped 44.9% year on year to R20.12bn, with rhodium delivering the biggest portion (44.9%), followed by palladium (20.9%) and platinum (20.1%). The cost of sales swelled by 37.6% to R11.05bn.
Headline earnings per share, a common profit measure in SA that excludes certain items, surged more than two-thirds to 1,608.5c, while earnings per share jumped 65.4% to 1,596.2c.
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