Production of chrome and platinum group metals (PGMs) miner Tharisa Minerals is lower so far in 2023 compared to the first nine months of 2022, and the resource group warned that it will remain subdued.
The company, valued at about R5.3bn on the JSE, said in its latest quarterly production report that PGMs production declined 14.9% to 114,000 ounces in the nine months to end-June, with platinum, palladium and rhodium output all lower.
The average PGM metal basket has also fallen more than a fifth year on year to $2,049/oz.
This comes as renewed fears of an economic slowdown, driven by the US and China, compounded price pressures in the PGMs market, despite car sales set to surpass last year’s production.
Tharisa said in its latest interim results that the slowdown in the PGMs market was partly the result of high inflation and rate hikes reducing demand as customers held onto their cars for longer and were hesitant to buy new ones.
The PGMs Tharisa produces are used in electrolysis to split water into hydrogen and oxygen, and also go into producing the fuel cells of electric-vehicle (EV) engines.
Tharisa, listed in Johannesburg and London, says the current trading prices are at a near 52-week low, but in the medium to long term prices should rise.
“While most commentators have pulled back price forecasts in line with recent events, the long-term outlook for even the most conservative forecasts are indicating higher averages for PGMs than current spot prices,” the company said.
Tharisa’s main operating asset is the Tharisa Mine near Rustenburg, in the south-western limb of the Bushveld Complex. Tharisa also owns Karo Platinum on the Great Dyke in Zimbabwe.
CEO Phoevos Pouroulis added: “We have shown in more complex historical times the nature of Tharisa with modern, low-cost structures leaves us well positioned to weather the environment and continue to provide returns to shareholders while actively and sustainably growing the business.”
Regarding the chrome market, solid demand helped prices while ports stock increased despite the supply pipeline remaining tight, with ongoing power cuts affecting smaller producers and issues at Transnet hampering logistics in SA.
The amount of chrome produced in the nine months to end-June excluding third-parties edged slightly higher to 1,166,700 tonnes, while the price jumped 28.4% to $258 per tonne.
“The chrome market looks set to continue its strong performance for the remainder of the calendar year 2023, particularly as new furnace commissioning continues to draw on material demand,” Tharisa said.
The miner’s net cash position grew 40% quarter on quarter to $141.5m (R2.6bn).
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