The future of South Africa’s platinum mining industry appears bleak as producers grapple with plummeting prices and waning demand, according to Northam Platinum CEO Paul Dunne.
The white metal, once a lucrative commodity, has seen its value drop significantly due to factors such as the increasing popularity of battery electric vehicles.
Dunne stated that the industry is entering an irreversible decline, citing the 13% price decrease since the beginning of last year.
This decline has had a substantial impact on the financial performance of mining companies, with Northam Platinum reporting an 81.6% drop in headline earnings per share for the year ending June 30.
The decline in platinum prices is compounded by the slump in its sister metal, palladium, and the significant drop in rhodium prices from their 2021 peak.
These factors have collectively contributed to a decline in South Africa’s platinum output, which has been on a downward trajectory since reaching its peak in 2006.
Dunne anticipates a further 10% decline in South African platinum output over the next five years, driven by factors such as under-investment in new mines and the growing popularity of battery-powered vehicles.
Despite this industry-wide trend, Northam Platinum aims to stabilize its output at around 1 million ounces per year.