South Africa’s PGM players brace for a wild ride
Chronic underinvestment in the local PGM industry means the sector is now embroiled in an urgent game of (expensive) catch-up, while likely demand for its products is anyone’s guess
Right now, it’s hard to make sense of the platinum group metals (PGM) industry. The outlook for the platinum price has improved recently, but the prices of other metals mined as its by-product, such as palladium and rhodium, are heading in the opposite direction. Confusingly, the trajectories of lesser known PGMs, such as iridium and ruthenium, are also different.
The challenge for industry analysts is two-fold. For a start, the outlook for primary metal supply from the world’s two largest producers, South Africa and Russia, has changed enormously. Russian PGM exports are sanctioned, though they still turn up in China. Primary supply from South Africa has been heavily disrupted by Eskom curtailments, an 80% increase in costs over the past few years, and underinvestment in resource development which could result in the closure of some cash-burning shafts...
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