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Tharisa benefiting from strong chrome demand while PGM prices are weak

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Business Report


Tharisa, the LSE- and JSE-mining and metals company, said yesterday that it had increased mill throughput of 8.7% at 1 424.4 kt, with improvements in both grade and recovery for platinum group metals (PGMs) and chrome concentrate in the quarter to December 31.

PGM output consequently increased to 35.7 koz (koz means thousand ounces) from 30.7 koz in the fourth quarter of the 2023 financial year.

Quarterly chrome output reached a record at 462.8 kt from 413.4 kt in the previous quarter. A major project is the development of the Karo Platinum Project, a low-cost, open-pit PGM asset located on the Great Dyke in Zimbabwe.

The PGM basket price improved slightly by 1% to $1 344 (R25058) an ounce (oz), from $1 331/oz in the previous quarter.

Average metallurgical grade chrome concentrate prices held steady at $291/t from $291/t).

Group cash on hand stood at $221.5 million, down from $268.8m in the fourth quarter, while debt of $126.6m was lower than $142.2m, resulting in a net cash position of $94.9m ($126.6m).

Production guidance for the 2024 financial year remained between 145 koz and 155 koz PGMs and 1.7 Mt to 1.8 Mt of chrome concentrates.

Directors said it had been a positive start to the new financial year in what was traditionally a tough quarter with the festive season and inclement weather typically causing challenges to operations.

“We have made good operational improvements, with waste mining advances leading to a better mining and plant performance, resulting in record quarterly chrome production. This performance is vital and underpins our development of the Karo Platinum Project,” they said.

While PGM prices were subdued, Tharisa’s co-product business model was operationally cash-generative, and the chrome market was enjoying strong demand.

“This year we will be expanding and rolling out our R&D projects in distinct stages of development and commercialisation,” the directors said.

Chrome demand was underpinned by economic fundamentals and continued concerns about inland logistics in South Africa. Freight rates were ticking up due to geo-political events impacting maritime shipping routes.

There had been a short term reprieve from PGM pricing pressure towards the end of the quarter, due to technical short covering.

“The major pressure on PGM prices remains the (perceived) excess inventory in the PGM pipeline. We expect this to be balanced once the real demand we have seen from end users becomes evident, in particular as further supply cuts are implemented and, on a macro level, policy reduction of subsidies for EV vehicles influences demand,” directors said.

The review of the commissioning timeline of the Karo Platinum Project remained on track for first ore in mill (FOIM) for June 2025. Funding solutions ring fenced to Karo Platinum were being pursued.