R1,000 invested in South Africa’s platinum miners this year – how much you would have now
Eastern Platinum is the best-performing JSE-listed platinum miner in the year to date, followed by Impala Platinum. Other miners have taken a hit in 2024.
Between 1 January and 6 June 2024, the share prices of nearly all of South Africa’s listed platinum miners fell.
Anglo American Platinum is down the most, at 35.46% year-to-date, followed by Northam Platinum, and Sibanye-Stillwater.
The best share price performance came from Eastern Platinum, with Impala Platinum as the runner-up.
These share prices reflect the pressure the platinum industry is under.
Several experts and industry roleplayers in South Africa’s platinum mining industry have warned that the industry faces severe pressure, and job cuts have increased significantly over the past years.
The average platinum group metal (PGM) price fell by around 35% last year, leading to profit declines for most South African PGM miners.
This is due to a global economic slowdown, which has decreased the demand for PGMs, particularly platinum, palladium, and rhodium.
The lower demand has been prevalent in the automotive and industrial sectors and has, therefore, caused a noticeable decline in PGM prices.
Several large platinum miners have reported big losses and announced thousands of job cuts in response to this pressure.
Minerals Council of South Africa chief economist Hugo Pienaar explained at the 2024 Mining Indaba that platinum mining shafts in South Africa are among the world’s deepest, oldest and most expensive to run, exacerbating the impact of declining PGM prices.
PGM miners have also been hit by high labour costs, which, when combined with electricity, make up most of their costs.
Many South African mining companies – including PGM miners – have also cut their production to reduce costs because they cannot export their commodities due to deteriorating rail infrastructure and port backlogs.
Below is an overview of South Africa’s platinum miners and their financial performances in the year to date.
Anglo American Platinum
Anglo American Platinum (Amplats) is the world’s leading primary producer of PGMs, accounting for roughly 38% of the global annual supply.
It is a South African-based mining company with most operations situated near Johannesburg.
The miner’s core business revolves around PGMs, including platinum, palladium, rhodium, iridium, ruthenium, and osmium. However, they also produce copper, nickel, diamonds, and iron ore.
Amplats’ latest full-year results, released earlier this year, showed that its profits for the 2023 financial year fell by over 70%.
Suppressed PGM prices, significant cost pressures, and an uncertain outlook impacted the company’s performance.
Its net revenue fell to R124.58 billion compared to R164.09 billion in 2022. The miner’s cost of sales also increased significantly, from R93.58 billion to R103.57 billion.
This increase was largely due to above-inflation energy costs, increased drilling activities, and higher labour and mechanical spare costs.
This saw the company make a profit of R18.11 billion for the year – far lower than the R66.77 billion it made in 2022.
The release of these results marked the start of a tough year for Amplats.
Earlier this year, the miner announced a proposed restructuring of its business that may affect about 4,300 jobs across its South African operations in an effort to cut costs.
Amplats’ majority owner, Anglo American, also recently announced that it will exit diamond, platinum and coal mining in a massive restructuring designed to fend off a takeover approach from rival BHP Group.
Anglo said it plans to demerge or sell its De Beers diamond business, separate its Anglo American Platinum unit and sell its coking coal mines in Australia.
These shocks have seen the miner’s share price plummet this year, with its share price down over 35% year to date and down 45% over the past year.
Northam Platinum
Northam Platinum is a South African company focused on the mining, processing, and marketing of PGMs, primarily platinum, palladium, and rhodium.
It is considered a mid-tier producer, smaller than giants like Amplats but still significant.
Their main operations are centred around two mines –
- Zondereinde Mine: A mature mine producing around 300,000 ounces of PGMs in concentrate annually
- Booysendal Mine: This mine hosts both Merensky and UG2 Reefs, offering the potential for future growth
The company’s latest full-year results for the year ended 30 June 2023 revealed a massive drop in the group’s profit and a loss for the company.
Group profit for the year dropped from R9.85 billion in 2022 to R2.55 billion – a 75% decrease.
Things have not improved for Northam since the release of these results. The company’s interim results for the six months through December 2023 showed a 73% decrease in operating profit and a 90% decline in earnings.
This poor financial performance has been reflected in the company’s share price performance, as it is down almost 15% year to date and 26% over the past year.
Sibanye-Stillwater
Sibanye-Stillwater is a South African multinational mining and metals processing group with a global footprint. Its operations and projects span five continents, including South Africa, the United States, and Zimbabwe.
Unlike other platinum-focused companies, Sibanye is diversified across various metals. It is a leading producer of PGMs, a top-tier gold producer with mines in South Africa, and it also produces and refines other metals like nickel, chrome, copper, and cobalt.
Sibanye has also experienced a significant downturn in its financial performance over the past year and announced multiple job cuts as a result.
For the year ended 31 December 2023, Sibanye reported a massive loss of R37.43 billion compared to a profit of R1.98 billion the year prior.
The company has also announced thousands of job cuts over the past year, with its latest announcement saying that 852 employees, including 805 contractors, could not be accommodated and have been retrenched or had their contracts terminated.
The miner said 1,281 employees were granted voluntary separation or early retirement packages, bringing the direct total employee reduction to 2,133.
Sibanye has seen its share price plummet, as it is down almost 37% over the past year and almost 12% in the year-to-date.
Impala Platinum
Impala Platinum (Implats) is a leading South African producer of PGMs and a significant player in the global market.
Established in 1966, Implats is considered a pioneer in the South African PGM industry and holds the distinction of operating the world’s second-deepest platinum mine – the Impala Mine – located in the Bushveld Complex.
Implats operates six mining operations in South Africa and Zimbabwe, with a strong focus on the Bushveld Igneous Complex. It also owns Impala Refining Services, a refining business that processes metals from their mines and others.
In 2023, Implats acquired Royal Bafokeng Platinum, significantly expanding its mining operations and resource base.
Its latest full-year results for the year through December 2023 revealed a massive drop in earnings and profit.
Profit for the year fell to R6.18 billion from R33.14 billion the year prior. Basic earnings per share dropped from 3,856 cents per share to 577 cents.
Despite this drop in profit, Implats’ share price has not performed as badly compared to other JSE-listed platinum miners.
Over the past year, Implats share price is down 42% over the past year, but year to date it is up over 5%.
Eastern Platinum
Eastern Platinum (Eastplats) is a Canadian mining company that focuses on exploring, developing, and extracting PGMs in South Africa.
It is a smaller player compared to giants like Amplats and Implats.
Eastplats targets high-grade PGM deposits, aiming to maximise profitability through efficient extraction and its projects are situated within the Bushveld Complex.
Crocodile River Mine is Eastplats’ primary operational asset. It’s a shallow mine with a processing plant that allows the company to re-mine and process tailings resources.
Through its growth strategy, the company aims to increase production to 60,000 ounces of PGM per annum by 2025.
For the year through December 2023, Eastplats reported impressive results.
Its revenue reached $106.9 million (R2.06 billion), a record full-year high representing a 98.3% increase. The miner also swung from a profit to a loss.
These positive results were largely due to increased chrome sales and improved mine operating income.
Earlier this year, it was also announced that the initial phase of the Zandfontein underground section of Eastplats’ CRM in South Africa is now fully operational.
The company’s share price has performed exceptionally well over the past year – up 44%. For the year to date, it is up 150%.
R1,000 invested in platinum miners in January 2024
| Platinum miner | Initial investment | Share price growth YTD | Current investment value |
| Anglo American Platinum | R1,000 | -35.46% | R645.40 |
| Northam Platinum | R1,000 | -14.27% | R857.30 |
| Sibanye-Stillwater | R1,000 | -12.46% | R875.40 |
| Impala Platinum | R1,000 | 5.37% | R1,053.70 |
| Eastern Platinum | R1,000 | 150.0% | R2,500.00 |
Comments