Tharisa’s Record Chrome Output Boosts South African Metals Sector Amid PGM Price Slump

Record Chrome Production Driven by Strong Demand

Tharisa has reported a historic achievement in chrome production, reaching 1.7 million tons for the fiscal year ending September 30, which reflects an 8% increase compared to 2023. This record output is largely attributed to robust demand from China and favorable pricing trends in the global market. The average annual price for Tharisa’s chrome concentrate rose by 13.7% to $299 per ton, underscoring a strong demand environment that executives expect to continue into 2025.

CEO Phoevos Pouroulis highlighted the company’s optimistic outlook for chrome, stating, “With chrome commanding a strong operational outlook, we anticipate real demand growth both in China and globally.” In light of this positive trajectory, Tharisa has set ambitious production targets for 2025, aiming for between 1.65 million and 1.8 million tons of chrome. This confidence in continued demand signals a strategic focus on enhancing chrome output as the company navigates the broader market landscape.

Struggles for Platinum Group Metals Amid Price Pressures

While chrome production flourishes, Tharisa’s performance in the platinum group metals (PGM) sector has not mirrored this success. The company recorded PGM production of 145,100 ounces, representing a modest 0.3% increase from the prior year. However, PGM prices have faced significant challenges, plummeting 28% year-on-year to $1,362 per ounce. This decline is attributed to weakened demand and ongoing inventory surpluses from the post-pandemic period, which have created an oversupply situation in the market.

In response to these price pressures, Tharisa has opted to reevaluate its investments in PGMs. Earlier in the year, the company decided to slow the development of its Karo platinum project in Zimbabwe, a strategic move aimed at conserving capital in an unfavorable pricing environment. Despite this slowdown, Tharisa is making progress on the Karo project’s construction, aligning it with available capital while carefully monitoring market conditions for any signs of recovery.

For the upcoming years, Tharisa has set its 2025 production guidance for PGMs between 140,000 and 160,000 ounces. The company remains cautiously optimistic, emphasizing the importance of balancing chrome and PGM outputs to navigate the ongoing volatility in prices. This dual focus reflects Tharisa’s strategy to capitalize on the strengths of its chrome operations while managing the risks associated with PGM production.

Conclusion

Overall, Tharisa’s record chrome output amidst a struggling PGM market illustrates the divergent trajectories within the South African metals sector. While chrome production benefits from strong demand and rising prices, PGM producers face challenges that require strategic adjustments.