Platinum price rally pulls producers from the brink, Valterra CEO says
South African miners, which account for over 70% of the world's platinum supply, cut out unprofitable production over the past two years after metal prices collapsed, amid warnings that the industry was in terminal decline.
Prices of the metal, used to make catalytic converters that curb vehicle emissions, surged 36% in the second quarter, lifted by rising Chinese imports and heavy flows into NYMEX exchange stocks under the threat of U.S. import tariffs, at a time when South African output has dropped.
"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.
However, prices are still not high enough for the industry to consider adding new production, he added.
"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," Miller said.
Valterra, formerly Anglo American Platinum, reported an 81% slump in half-year profit, hit by lower output and costs associated with its demerger from the Anglo American group.
Headline earnings were 1.2 billion rand ($67.62 million) in the six months to June 30, down from 6.5 billion rand a year earlier.
Valterra declared an interim dividend of 2 rand per share, down 79% from the payout a year earlier.
The world's biggest PGM producer by value demerged in June and is now listed separately in Johannesburg and London while global mining giant Anglo restructures its business to focus on copper.
($1 = 17.7452 rand)
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