Northam Platinum's performance and future outlook amid PGM market challenges

Recent platinum group metal price appreciation is offering some relief to the PGM sector, but it is still not yet at a level to support sustainable mining across the industry, and certainly not the much-needed development of new operations, according to Northam Platinum CEO Paul Dunne.

“We are in the envious position of controlling high-quality, well-capitalised and long-life assets,” he wrote at the release of Northam Platinum’s results for the year to June 30, on Friday.

Dunne said the PGM market had tightened, and their view remained that the factors underlying this were fundamental and unlikely to correct in the medium term.

The company declared a R2 a share final dividend for the year, which Dunne said reflected their confidence in the future of the group. The final dividend brought the dividend payout for the year to R2.15 cents, which was 26.5% more than what was paid out the previous year.

The integrated report described Northam as the best-performing share of the PGM mining groups in South Africa, with a 406% growth in the share price over 10 years. The share price was trading 2.04% lower at R197.85 on Friday afternoon, a price slightly higher than the R195.98 that it traded at a year before.

“Existing demand for these special metals remains, and new demands are burgeoning, such as for ruthenium in data storage and nylon production in particular. Despite positive market signalling, global uncertainty continues, and we remain cautious and will maintain our focus on safe production and efficient mining at the right cost, enabled by our strong liquidity,” he said.

The group was consolidating production at its mainstay operations, Booysendal and Zondereinde, and the imminent commissioning of 3 Shaft was expected to progressively provide efficiency benefits to Zondereinde.

The quality of the Eland orebody demanded the successful ramp-up of this mine, he said.

“We have made steady progress and still forecast full production in 2029. Sales volumes for the year exceeded one million ounces for the first time in Northam’s history, and we expect steady growth over the coming years,” he said.

The recent over-subscribed DMTN Programme, together with a one-off payment of $66 million from a refining partner, post year-end, further strengthened the balance sheet.

“To maintain momentum, we are setting new five-year targets to continue to safely grow production down the cost curve, whilst scaling up our third-party business and further improving by-product revenue from chrome,” he said.

“We have to date delivered on our targets. Internally, the company is in a very good state of health, with a fantastic team, quality operations, a growth path and the financial backbone of a strong balance sheet and cash position to enable sustainable operations well into the future.”

The approval of a R2.00 final dividend by the board was an expression of confidence in the future of the company,he said.

The group’s guidance for the 2026 financial year was production of between 1 500 000 and 160 000 000 tons of chrome and 1.03 million ounces of PGM metals.

In the past year to June 30, sales revenue increased 6.9% to R32.9 billion from R30.8bn, and operating profit fell 25.5% to R3.6bn from R4.8bn. Headline earnings per share fell 13.5% to 380.8 cents from 440 cents in 2024.

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