Anglo American Platinum (Amplats) has listed SA’s constrained energy and water infrastructure among the top risks facing the group — much higher than the risk it attaches to demand for platinum group metals (PGM) — which have come under pressure due to emergence of electric vehicles.
The PGM major in its 2024 annual report published on Thursday, said beyond the risk of a regional grid outage, the company was challenged by Eskom’s ability to sustainably supply power — listing energy infrastructure as the number one risk facing the group.
“Though performance improved, sustained improvement is challenged by uncertainty at some power stations. This could result in lost and delayed production, safety concerns (particularly for underground activities) and higher-than-expected cost increases,” it said.
The company will complete its demerger from Anglo American in June and be renamed Valterra Platinum subject to shareholder approval.
Amplats highlighted the advantages of having reliable power supply, after great operational strides made by Eskom in 2024.
“Security of electricity supply improved in calendar 2024, after record levels of load curtailment by the SA national power utility, Eskom, in the prior year. To put this into perspective, the PGM ounces deferred in 2022 and 2023 due to load curtailment were fully processed in 2024, restoring work-in-progress inventory to normal levels,” the firm said.
“While we welcome the reprieve from load curtailment since April 2024, this has not lessened the vital need for a cleaner energy supply to improve the country’s investment case.”
Eskom has over the past two months seen its system come under pressure with the menace of power cuts becoming a regular feature again.
Amplats also flagged SA’s water crunch as the number four risk facing the company.
“Failure to obtain and sustain the level of water security needed to support our operations as SA is in a water-stressed region, coupled with public-sector challenges and growth in water demand from communities. Water quality and pollution of water resources is viewed as an additional risk area,” it said.
The report also shows Amplats top brass are unfazed by PGM demand, listing it as the number 10 risk facing the Craig Miller-led group. It said while in the long-term PGMs face challenges from vehicle electrification, the commodities will enjoy rising demand from many other existing applications and new demand from those in development.
Amplats said at present, automotive demand accounts for more than 60% of PGM demand, largely through catalytic converters. These are pollution-control devices for vehicles and other machinery with internal-combustion engines.
“The sector is most important for palladium and rhodium, significant but less so for platinum and only modestly for iridium (through spark plugs). For 2025 and beyond, most auto analysts expect light-vehicle production will continue rising to meet higher demand from richer and more populous societies,” it said.
“Yet some expect growth to slow relative to historical trends on longer car lifespans and lifestyle changes. Such theories are plausible but untested, meaning there is potential upside to these forecasts.”
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