JSE-listed Northam Platinum has reported record production and sales for the 2025 financial year, surpassing one-million ounces sold for the first time in its history.

Despite weaker margins and rising costs, the group achieved higher output and revenue, with management pointing to tightening platinum group metals (PGM) markets and stronger prices since mid-year as a key driver of renewed growth confidence.

For the year to June 30, revenue rose by 6.9% to R32.9-billion, from R30.8-billion in 2024, while sales volumes increased by 5.9% to a little over one-million ounces of platinum, palladium, rhodium and gold (4E), compared with the 950 251 oz sold in the prior financial year.

Output from own operations came in at 899 244 oz, up slightly from 892 876 oz a year earlier.

Earnings, however, reflected cost pressures and a weaker pricing environment in the early part of the year. Operating profit fell by 25.5% to R3.6-billion, down from R4.8-billion in 2024, while earnings before interest, taxation, depreciation and amortisation (Ebitda) declined by 21.6% to R4.9-billion from R6.3-billion.

The operating profit margin narrowed to 10.9% from 15.7% and headline earnings a share came in at 380.8c, slightly below basic earnings a share of 381.4c.

“Despite the difficult market, we’ve presented a strong, high-quality set of earnings and that’s been backed up by a good 60% payout on the dividend. In June, July and August, the market prices have picked up, led by platinum, and that’s very promising for the sector as a whole, including Northam. It’s giving us some tailwind,” Northam CEO Paul Dunne told Mining Weekly on August 29.

However, Dunne stressed that the stronger pricing backdrop was still relatively new, noting that management was approaching the outlook with measured confidence.

“What we did caution [was] that it’s only been a couple of months. So we are cautiously optimistic. It looks good, and we can see that the markets are tight, with higher spot prices reflecting limited availability of metal,” he said.

Dunne noted that all of Northam’s major capital projects were progressing according to plan, with total capital expenditure rising to R4.9-billion in 2025, from R4.6-billion a year earlier. This investment will increase further to R5.2-billion in the 2026 financial year as projects move toward completion.

Northam reported that its Booysendal project is now fully ramped up, while commissioning of the new 3 Shaft at Zondereinde is scheduled for next year. At Eland, ramp-up is halfway complete and is expected to be finalised by 2029.

“There’s a lot of project work going on at Northam, and we’re investing accordingly. Our view, broadly speaking, is that it’s time to push ahead and complete these projects, given what we see in the market. The market needs the metal, in our view, and we can provide it,” Dunne said.

He acknowledged that the past two-and-a-half years had been tough for the industry, but said recent trends suggested an improving environment.

“It’s been quite rough, but we’ve seen a pickup. The indications are that it’s good. But I do just add a caveat that it’s only been three or four months. We’d like to see a little bit more runway on this price backdrop, which is helping the whole sector, including miners, refiners and recyclers,” he said.

Dunne said the tightening of PGM markets had been evident in lease rates, which he noted had spiked to “extreme levels”.

“If you don’t have platinum and you want to borrow it this morning, it will cost you 15% plus on the borrowing rate. Instead of paying that, you’d rather go to the spot market and buy the metal directly.

“When lease rates go up to that extent, people are more inclined to go to the spot market and that’s when you get price discovery. That’s what we’re seeing now,” he explained.

Northam closed the year with net debt of R5.1-billion, translating into a net debt-to-Ebitda ratio of 1.04. Cash costs rose 8.1% to R25 728/oz of 4E, from R23 811/oz of 4E in 2024, reflecting broad inflationary pressures and rising electricity tariffs.

“The biggest risk we face is the cost of power. A couple of years ago, the issue was availability. Now it’s the cost. We’ve experienced more than a 15% increase in the unit cost of electricity from Eskom. That hurts, especially for operations like Zondereinde, which is deep-level and energy-intensive,” Dunne said.

To mitigate these pressures, Northam is rolling out an extensive renewable-energy programme. This includes three projects: a wind farm behind the meter at Zondereinde, another wind farm south of Sutherland in partnership with Exxaro and wheeled PV capacity across the grid.

“Together, these will reduce our carbon footprint by 60% by 2027 or 2028. At the same time, our Eskom bill will be reduced by about R750-million a year. We’ve gone quite aggressive on renewables and the projects are moving along nicely,” Dunne said.

Water availability has also emerged as a risk, with Zondereinde particularly vulnerable because its hydropower drills and milling processes depend on reliable water supply.

“We’ve had a number of days without water from the bulk supplier. We’ve helped where we can, providing equipment and working together to assist, but it’s definitely a risk that’s become more significant,” Dunne said.

He also pointed to cybercrime as an area of vigilance, noting that, while Northam had not been targeted, other mining companies had faced ransomware attacks.

“We’re very conscious that we need to protect ourselves on the IT side against this kind of criminal activity,” he said.

Despite the challenges, Northam’s ability to lift sales above one-million ounces marked a historic milestone for the company, underpinned by project execution and steady operational performance.

Total tonnes milled were stable year-on-year at 11.27-million tonnes, while development metres increased 6.2% to more than 1.3-million metres.