IT is three years since the bubble in platinum group metal (PGM) prices began to deflate. Back in June 2021, rhodium was trading at over $20,000 per ounce. It’s now at $4,650/oz. Palladium, which is larger than rhodium in terms of supply, has fallen in similar fashion.

On reflection, South African miners were slow to react. The first cost-cutting was only in the third quarter last year after Sibanye-Stillwater wrote down R20bn in assets, half of which was for its Stillwater mine in the US. Stillwater, which accounts for 420,000 ounces annually in palladium output, is still operating. But it might not for long.

Sibanye-Stillwater CEO Neal Froneman said in June that he was ready to close Stillwater despite the awkward optics of taking that step. Cutting US jobs while trying to fund the new Rhyolite Ridge lithium/boron project in Nevada, using US government subsidies, is not a good look for Sibanye-Stillwater. But if the asset is bleeding cash what choice does the company have?

Similarly pushed into cost-cutting, Impala Platinum (Implats) and Anglo American Platinum (Amplats) have announced restructuring affecting between 10,000 to 15,000 jobs in the South African PGM sector.

All in all, South African PGM miners have announced cuts totalling 500,000 oz in production over the next five years, according to UK research consultancy Metals Focus.

Wilma Swarts, PGM research director for Metals Focus says the production cuts could end up being much higher — three times higher, in fact. “From our assessment, the rapid decline in spot prices and the current and anticipated cost-cutting measures are not fully reflected in the mine plans,” she says. It’s worth remembering that mine plans are perforce statements of possibility.

Reaad the full article at:  No sign of life yet in PGMs despite industry restructuring - Miningmx