The adverse effects of harsh weather conditions on Tharisa, a chrome and platinum group metals (PGM) miner, have led to a 10% reduction in its full-year production guidance.
This has impacted the company’s open pit mining operations from December last year to February this year.
Tharisa had previously forecasted the development of between 175,000oz and 185,000oz of PGM and 1.75mt to 1.85mt of chrome concentrates in the year leading up to September.
CEO Phoevos Pouroulis confirmed that the cut would have a financial impact, but this would be offset by high chrome prices, which could reach up to $300/t. He expects the Tharisa mine to perform better in the second half of the financial year.
For Pouroulis, PGM prices have recently reduced, but seem to be performing well: “even at these levels, we continue to generate healthy margins”.
Meanwhile, rhodium and palladium prices are most affected by the market, with rhodium suffering from a small, tight, illiquid market that is influenced by a solitary seller. Nevertheless, the outlook for the PGM basket remains strong, with tight supply and firm demand driving prices up.
Pouroulis cited platinum as the standout metal in the market, as the shift into a supply deficit becomes more evident. According to Pouroulis, the long-term fundamentals for chrome are “firmly intact”. He added that despite historically low levels of stockpiles in China, demand for the product from South Africa remains strong, as supply from the country has been hampered by load shedding and inland logistics challenges.
Tharisa is now moving forward with developing the Karo PGM mine in Zimbabwe. Pouroulis has confirmed that the earthwork is on schedule, and civils contracts have already been awarded for the construction of plants and infrastructure.
Turning to the PGM market Pouroulis said PGM prices came under pressure during the March quarter “as demand softened and destocking took some shine off the strong pricing seen in the 2022 financial year.
“Rhodium and palladium prices remain the most affected with rhodium suffering from a small, tight, illiquid market influenced by a single seller. However, the outlook for the PGM basket remains strong as tight supply and strong demand will ensure prices strengthen, with platinum the standout metal as the continued shift into supply deficit becomes evident.” he concluded.