End of an era comes at a big cost for major South African miner

Valterra Platinum said first-half profit likely fell as much as 98% due to a drop in sales and costs related to the company’s spinoff from Anglo American earlier this year.

Earnings declined as sales volumes of platinum-group metals dropped by 25%, the Johannesburg-based company formerly known as Anglo American Platinum said Friday in a statement.

The decline was due to lower refined production after significant rainfall and flooding in February disrupted operations.

Profits were also impacted by R1.4 billion in one-off demerger-related costs when Valterra split from Anglo. The decline in earnings was partially offset by cost savings of R2.1 billion, the company said.

Anglo American spun off its platinum business at the beginning of June, distributing its controlling interest in Johannesburg-listed Valterra Platinum to shareholders.

The spinoff came after more than two decades during which platinum-group metals were a core driver of both the fortunes of Anglo and South Africa.

The industry eclipsed gold — the historic foundation of the country’s wealth — 25 years ago, just after Anglo strengthened its grip on the sector by taking control of what was then the world’s biggest platinum producer.

Valterra has spent about $500 million in the last seven years on developing new markets for PGMs, including hydrogen-powered transport, cloud computing and food preservation, according to Miller.

It’s also invested in a firm trying to reduce the weight of EV batteries by introducing palladium. 

Valterra will continue those efforts, but it’s also hoping that auto demand will hold up better than many previously expected, buoyed by hybrids and as EV penetration slows.