TSX- and NYSE American-listed Platinum Group Metals (PTM), has signed a memorandum of understanding (MoU) with Saudi Arabian company Ajlan & Bros Company and the Ministry of Investment of Saudi Arabia (MISA) as part of plans to build a platinum group metals (PGM) smelter and base metal refinery in the Middle Eastern country.

Under the terms of the MoU, the MISA will offer strategic guidance and study potential financial support to the proposed PGM smelter and base metals refinery to be located in Saudi Arabia, as well as for the Waterberg PGM project under development by PTM and its partners in South Africa.

The MoU with the MISA aligns with initiatives already under way between Ajlan and PTM. The two entities in December 2023 entered into a cooperation agreement to study the establishment of a PGM smelter and base metals refinery in Saudi Arabia.

The cooperation agreement encompasses three phases: a global PGM concentrate market study, a definitive feasibility study for the construction and operation of a PGM smelter and base metals refinery in Saudi Arabia and an option to form an incorporated 50:50 joint venture (JV) following the completion of the DFS.

The DFS will assume the export of PGM concentrate from the Waterberg project – a JV between PTM, Impala Platinum, HJ Platinum and Mnombo Wethu Consultants – in South Africa to a port facility in Saudi Arabia.

The market study was completed recently by a globally recognised consulting group specialising in PGMs and associated base metal by-products. The objective of the study was to identify potential sources of PGM-bearing concentrate or material that could augment the processing of Waterberg PGM concentrate and reduce the risk of operations being dependent upon concentrate from one source.

The study concluded that end-of-life autocatalysts and petrochemical catalysts, sourced from the Gulf region, could augment the operation of a Waterberg-focused PGM smelter and base metals refinery in Saudi Arabia.

Other sources of mined PGM concentrate from Southern Africa, if available, may also be considered over the longer term.

A key requirement before a Waterberg-focused PGM smelter and base metals refinery can be built and operated in Saudi Arabia will be long-term approval for the export of unrefined precious metals in concentrate from South Africa.

PTM has been working with the South African government to identify local beneficiation opportunities and to analyse the possible impact of exporting concentrate on the value chain.