Valterra's maiden post-Anglo results underwhelm, but rising PGM prices bode well

Daily Maverick

28-07-2025

The Valterra demerger from Anglo was a fairly straightforward process and the company looks ready to carve out its own destiny. The De Beers disposal will be much more challenging.
Valterra Platinum's maiden interim results hardly shot the lights out, but rising platinum group metals prices (PGM) bode well for it as a standalone business outside the Anglo American stable.
Indeed, with PGM prices once again on the boil, Anglo may yet rue its decision to demerge its platinum arm as it pivots to a sharper focus on copper, iron ore and fertiliser minerals.
Valterra completed its demerger from Anglo in late May as the PGM market was showing the signs of an upturn.
But the rally was not completely reflected in its results, which were hampered by an extreme flooding event at its Amandelbult operation – the weather is having a material impact on many a mining company these days.
The company took a R4.6-billion hit from that deluge, but expects to get most of the money back from insurance. It also had a hit of R1.4-billion in one-off demerger-related costs – lawyers and bankers don't come cheap.
Headline earnings per share tanked 81% to R4.73 per share.
But the future, while perhaps not bright enough to don shades at this point, looks promising as the sun once again rises on the PGM industry.
Perky prices
Prices in the year to date have been perky. Platinum is up over 50% to more than 10-year highs, palladium is 35% higher, and rhodium is fetching 42% more.
'We have guided for a 15% increase in production in the second half, and we will be delivering that into buoyant prices,' CEO Craig Miller told Daily Maverick.
'We have been saying for quite some time that the market is in a deficit, that supply is relatively tight and that demand is robust. And that really played out in June and now July. The basket price in July is 20% higher than where it was in the second quarter.'
Several factors explain this rebound from depressed prices that in recent years slashed the profits of PGM producers.
These include the supply constraints that Miller mentioned, spurred in part by a collapse of the PGM recycling industry, which has also been battered by low prices.
There have also been shifting demand patterns. Record gold prices have seen the jewellery industry switch to lower-priced platinum, while sales of hybrid vehicles – which actually require more PGMs than internal combustion engine vehicles – are gaining traction.
For the second half of the year, Valterra will be able to bank on the recovery at Amandebult and higher grades from its cash-spinning Mogalakwena operation.
The Valterra demerger from Anglo was also a fairly straightforward process, and the company looks ready to carve out its own destiny.
Anglo will be releasing its interim results on Thursday and should provide an update then on its plans to dispose of diamond giant De Beers.
The PGM sector has had a rough ride in recent years, but producers of natural diamonds face an existential crisis from the surge in lab-grown gems and changing consumer patterns.