Most mines have recovered from loss-making positions due to the platinum price rally in the first half of 2025, but the industry is still a long way from adding new production, Valterra Platinum CEO Craig Miller said on Monday.
“About 90% of the industry is now making money or just breaking even, versus 40% at the end of last year,” Miller told Reuters in an interview.
Drastic measures
The global platinum market has been significantly impacted by the strategic decisions of South African miners, who collectively contribute over 70% of the world’s supply.
In response to a dramatic collapse in metal prices over the past two years, these miners were compelled to undertake drastic measures, including cutting down on unprofitable production.
This period was marked by dire warnings from industry experts and analysts, who cautioned that the platinum industry was facing a “terminal decline.”
The price slump, driven by a combination of factors such as decreased demand from the automotive sector (a major consumer of platinum in catalytic converters) and an oversupply in the market, rendered many mining operations economically unviable.
This forced reduction in output, while painful in the short term, was a necessary step for the survival of the industry, aiming to rebalance supply and demand and ultimately stabilise prices.
The implications of these production cuts extend beyond South Africa, affecting the global supply chain and potentially influencing the future trajectory of platinum prices and investment.
Platinum prices
During the second quarter of this year, the price of the metal, a key component in catalytic converters for vehicle emissions, saw a 36% increase.
This surge was driven by several factors: a rise in Chinese imports, significant flows into NYMEX exchange stocks due to potential US import tariffs, and a concurrent decline in South African output.
At the time of writing, the platinum price on COMEX was at $1,446.50 an ounce, up 1.7% from the previous close.
Commerzbank AG expects platinum prices to average $1,350 an ounce by the end of 2025 compared to $1,250 an ounce projected earlier.
Prices are not high enough
However, Miller further stated that platinum prices remain too low for the industry to contemplate increasing production.
Miller said:
You need to see another 50% increase in prices in order to incentivise that new production to come to market. So we still think there’s some way to go.
Valterra, previously known as Anglo American Platinum, announced an 81% decline in half-year profit.
This slump was attributed to decreased output and expenses related to its demerger from the Anglo American group.
Headline earnings for the six months ending June 30 fell to 1.2 billion rand ($67.62 million) from 6.5 billion rand the previous year.
Valterra announced an interim dividend of 2 rand per share, which represents a 79% decrease from the previous year’s payout.
The world’s largest PGM producer, which demerged in June, is now separately listed in Johannesburg and London.
This move comes as global mining giant Anglo restructures its business to prioritise copper.
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