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South Africa’s Northam Platinum half-year earnings more than treble

South Africa’s Northam Platinum on Friday reported a three-fold increase in interim earnings, underpinned by higher metal prices and increased sales volumes.

Normalised headline earning per share (HEPS), the main profit measure used in South Africa that strips out certain one-off items, for the six months ended Dec. 31 jumped 241% to 369.6 cents, from 108.5 cents in the year-ago period.

Palladium and rhodium, widely used in vehicle exhausts to reduce harmful emissions, have climbed as tighter environmental regulations force carmakers to buy more of the precious metals used in catalytic converters.

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“The operations are performing well and are expected to deliver a solid performance for the full financial year. Project execution is on track and the company is well-positioned to benefit from stronger PGM (platinum group metals) prices,” said Chief Executive Officer Paul Dunne.

Tighter regulations helped boost profit of other South African miners such as Impala Platinum, Sibanye-Stillwater and Anglo American Platinum after posting years of losses.

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Northam Platinum, which also produces palladium and rhodium, said its earnings before interest, tax, depreciation and amortization (EBITDA) rose to 3.193 billion rand ($209.55 million), from 1.125 billion rand a year earlier.

The miner said its Zondereinde mine had experienced a fire on the eastern side in July, which resulted in an interruption to its business with power cuts by state-owned utility Eskom further impacting operations.

Half-year production surged 20% to 306,738 ounces, compared with 256,461 ounces a year earlier, Northam said, adding that it had generated significant free cash flow of 695.8 million rand for the first time since 2015.

“It is expected that the group’s ability to generate free cash flow in the foreseeable future will be positively impacted by production growth and the continuing increase in PGM,” said Northam.

However, the company did not declare an interim dividend.