Northam Platinum stocks plunged 2.7% on the JSE to R108.97 per share today in spite of announcing a robust increase in its production of platinum group metals (PGM) and chrome concentrate during the half-year period concluded on 31 December 2024.

In a voluntary production update today, the group reported a 3.7% rise in total equivalent refined PGM sourced from its own mining operations, alongside a notable 7.5% growth in chrome concentrate production for the 6-month period ended 31 December 2024 when compared to the previous year’s figures for the same period.

While the decrease in equivalent refined PGM from third-party sources was evident—falling to 59 743 ounces of 4E from 83 107 ounces—a reduction was anticipated given the current dynamics affecting the PGM sector.

Nevertheless, Northam said it remained resolutely focused on enhancing its PGM production through its own operations, steadfastly working towards its strategic objective of producing one million 4E ounces annually.

The group’s strategy involves an emphasis on mechanised mining, targeting high-quality UG2 orebodies, alongside efforts to diversify operational, geographical, metallurgical, and revenue streams to lower overall risk.

This strategy has allowed Northam to not only extract value from UG2 ore but also achieve significant sales of chrome concentrate. Such measures fortify the group’s standing at the lower end of the cost curve, ensuring that production remains viable on a positive risk-adjusted basis.

As a result, this approach promises to sustain the longevity and quality of Northam’s assets.

Despite facing operational challenges, including a stoppage in November due to an Eskom feed substation failure, production targets at the Zondereinde operation remained steadfast.

Increased milling of UG2 ore, along with enhancements in chrome recovery, have significantly bolstered chrome concentrate production. Furthermore, preparations for the commissioning of the 3 shaft are ongoing, expected to enhance production efficiencies in the mid to long-term.

Meanwhile, the Booysendal operation continues to exceed production targets, showcasing its intrinsic value and Northam’s prowess in efficiently unlocking the orebody’s long-term potential.

While a shift in processing to preferentially mill Merensky ore aimed at reducing accrued stockpiles has temporarily dampened chrome concentrate output, the overall performance has been commendable.

The ramp-up at Eland has seen mixed results, as it progresses amid tragic incidents that claimed two lives—one during shotcreting operations and another during a conveyor belt maintenance procedure. Despite these setbacks, operational activities continue to meet stoping production targets, and improvements in both PGM and chrome concentrators have led to enhanced recovery rates, ultimately reflecting in increased production output.

As Northam navigates these complex operational waters, the group’s full-year production guidance for its own operations remains unchanged, even amidst the prevailing volatile market conditions impacting the entire PGM sector.

BUSINESS REPORT