Surging PGM prices give Northam Platinum hope for monumental rise in profit

JOHANNESBURG – Northam Platinum said on Wednesday that it expected its annual earnings to jump by up to 3 459 percent on the back of a surge in platinum group metal (PGM) prices, which cushioned the impact of production disruptions due to Covid-19.

Northam, which operates the Zondereinde, Booysendal and Elands mines, reported that for the year ended June headline earnings would jump monumentally to between 562.40 cents, or 3 459 percent, and 621.60c, or 3 834 percent, from 15.8c a year earlier.

Northam said total revenue per platinum ounce sold increased by 78.8 percent to R53 009 per platinum ounce from R29 640 per platinum ounce a year prior, resulting in a cash margin per platinum ounce in excess of 40 percent.

“This is despite significant production losses associated with the national lockdown and phased restart of mining activities following the onset of the Covid-19 pandemic in South Africa,” said the company.

Northam lost an estimated 108 685 4E ounces because of production disruptions and incurred once-off costs of R977.2 million, the bulk of which related to employee costs as a result of the lockdown.