Northam Platinum said it had halted some capital projects due to the current slump in metal prices, which saw the South African miner’s half-year profit plunge by 93%.
South African platinum group metal (PGM) producers, who account for about 70% of global output, are restructuring their operations to protect margins after metal prices fell sharply over the past year.
Northam’s bigger rivals Anglo American Platinum, Impala Platinum, and Sibanye Stillwater, are restructuring unprofitable production by halting projects and cutting jobs.
“Given the current market conditions, Northam has trimmed its capital schedule in the interest of capital preservation,” Northam said in a statement.
Prices of PGMs – mostly used by automakers to curb toxic emissions – have fallen, with producers citing weaker economic growth in China and destocking by manufacturers who built up stocks during Russia’s invasion of Ukraine.
The price of palladium, which makes up nearly a third of Northam’s metal output, fell by 37% last year after surging to more than US$3,400 an ounce following Moscow’s invasion. Rhodium, which soared to almost US$30,000 an ounce in 2021, is trading around US$4,000 an ounce.
Northam said it has deferred “certain workstreams” at its Zondereinde operations, while some development work at Booysendal and Eland mines has been temporarily halted.
Its headline earnings per share (HEPS) – the profit measure commonly used in South Africa – came in at R1.21 in the six-month period ended Dec. 31, down from R16.09 in the year-ago period.
The company declared an interim dividend of R1 per share.
