Anglo-American Platinum, the world’s biggest platinum producer, is optimistic about the outlook for platinum group metals (PGM), noting that demand for battery electric vehicles has fallen short of expectations.
Amplats will demerge from parent Anglo American in June and has proposed a name change to Valterra Platinum, which has to be approved at its upcoming annual general meeting. The company told shareholders, investment analysts and journalists this week that internal combustion engine (ICE) vehicles would be around for longer than previously anticipated, giving a boost to the precious metal used to make catalytic converters for vehicle exhausts.
Amplats executive head of marketing Hilton Ingram said trends show that global automotive demand volumes could beat consensus forecasts and that market demand “overwhelmingly” favours ICE vehicles.
He said established markets, including the US, Western Europe and Japan, had a 10% battery electric vehicle (BEV) market share last year, barely higher than in 2023, and the BEV market share in emerging markets outside China was at 3%.
Ingram said despite China’s advantages, including its investment in grid and charging infrastructure, motorists still required “range vehicles” which need PGM catalysts as customers looked for longer range and manufacturers for cheaper costs.
“Customers want the freedom to refuel or recharge. It’s no wonder global BEV forecasts, while still rising, have been revised lower. If we compare consensus, the share expected to be BEV by 2030 has come down from 40% to 33% and that equates to an additional 1-million ounces of PGM demand forecasts as of 2030,” said Ingram.
Headwinds for BEVs include the slow rollout of charging infrastructure, high purchase and insurance costs, uncertain resale values, and tariffs, he said. The group forecast for BEV for 2030 was a 25% market share accounting for a further 1-million ounces improvement in PGM demand.
“Of course, we are not dismissive of the prospects for BEVs, we just believe catalysed vehicles will have a greater market share for longer.”
In 2024 the global automotive sector accounted for 66% of PGM market demand mainly for catalytic converters and oxygen sensors. Industrial applications accounted for 26%, investment comprised 3% PGM demand, and 5% came for jewellery.
Ingram said opportunities for platinum included regaining market share from white gold which was invented as a cheap alternative to platinum.
The key message here is that we remain disciplined in terms of capital allocation and the future projects that we are investing in are value accretive with compelling returns
— Sayurie Naidoo, Amplats CFO
“If we can regain as little as 10% of white gold sales that is an additional 1.5-million ounces of platinum demand,” he said.
As Amplats prepares to become Valterra Platinum, the group promised to pay a dividend of 40% of headline earnings while investing in improving the efficiency of its operations.
CFO Sayurie Naidoo said maintaining costs would also be a priority given the low platinum environment. Amplats achieved R12bn of annual cost savings, exceeding its 2024 target of R10bn.
The group’s all-in sustaining cost was 13% lower at $986 per 3E ounce and below the target of $1,050 per 3E ounce. Its headline earnings of R8.4bn or R32.05 per share was down 40% and it generated R14.6bn in operating free cash flow, up from R3.2bn in 2023.
Naidoo said the company’s capital expenditure for the next two to three years was focused on the Mogalakwena underground project, the repurposing of the Mortimer smelter to a slag cleaning furnace with fast payback and low execution, and the development of Tumela 1 shaft to deliver high margin ounces at the Amandelbult mine.
“The key message here is that we remain disciplined in terms of capital allocation and the future projects that we are investing in are value accretive with compelling returns,” she said.
CEO Craig Miller said Amplats remained a compelling investment proposition with low-cost assets.
“We want to make the most of what we think are some of the best ore bodies in the PGM industry. Our disciplined capital allocation approach ensures we deliver maximum value for the portfolio, recognising the role that each asset plays,” Miller said.
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