London- and Johannesburg-listed chrome and platinum group metals (PGM) miner Tharisa has reported improvements in its production for the financial year ended September 30, which culminated in a higher operating profit.

The group produced 145 100 oz of PGMs for the 2024 financial year, compared with the 144 700 oz produced in the prior year, while chrome concentrate production had increased to 1.7-million tonnes, from 1.5-million tonnes in the prior year.

Notably, the company’s chrome output was the highest in its history of chrome concentrate production.

Tharisa’s operating profit increased by 26.3% year-on-year to $119-million, compared with an operating profit of $94.7-million in the prior year.

The company reports that the metallurgical-grade chrome concentrate price averaged $299/t in the year under review, which is 13.7% higher compared with the average price of $263/t in the prior year.

In turn, the average PGM basket price was 28.1% lower year-on-year at $1 362/oz, compared with an average basket price of $1 893/oz in the prior year.

Earnings before interest, taxes, depreciation and amortisation (Ebitda) of $177-million in the reporting year compare with Ebitda of $136-million in the prior year.

Earnings per share (EPS) amounted to $0.277 in the year under review, compared with EPS of $0.274 apiece in the prior year.

In turn, headline earnings per share (HEPS) were 0.7% lower year-on-year at $0.281.

Tharisa declared a total dividend of $0.045 apiece, which is 10% lower than the dividend of $0.05 that was declared in the prior year.

Positively, the group’s return on invested capital increased from 10.5% in the prior year to 11.1% in the reporting year, marking a 5.7% increase.

The company has $223-million of cash on hand and debt of $106-million, resulting in a net cash position of $117-million.

The company’s flagship operating asset is the Tharisa mine, located in the Bushveld Complex of South Africa. Tharisa is also developing the Karo platinum project in Zimbabwe through a 76% shareholding in Karo Mining, which, in turn, holds 85% of the project.

Tharisa will have an effective 68% interest in the Karo project once it fulfils its capital commitments.

The group’s total capital expenditure amounted to $195-million in the year under review, compared with just under $70-million having been spent in the prior year.  

Of the total capital spent, $24.2-million related to Tharisa’s mining fleet and $164-million to other mining assets. Total capital spent on the Karo project amounted to $84.1-million in the year.

Meanwhile, Tharisa has a 40 MW solar project under construction, under a 15-year power purchase agreement with Etana for the procurement of wheeled renewable energy. The green electricity will ensure Tharisa reduces its carbon footprint by 30% by 2030, against the company’s aim of being carbon neutral by 2050.

The group has set its production guidance for the 2025 financial year at between 140 000 oz and 160 000 oz of PGMs and between 1.65-million and 1.8-million tonnes of chrome concentrate. 

MARKET VIEW

Tharisa attributes the lower average platinum prices in the year under review to factors such as destocking in the market, which resulted in pricing pressure. The effect of low prices often manifests in industrywide production cutbacks and shaft closures.

This is exacerbated by excess inventory in the PGM pipeline which, contrary to some forecasts, did stretch into the latter part of the year as PGM prices continued to be constrained by the latency of pipeline destocking.

The company is confident, however, that PGM prices will trend higher in the next 12 to 24 months on the back of internal combustion engine relevance and demand for automotive catalysts remaining high.

The physical platinum market, in turn, is entering a longer period of supply deficit, which should drive prices higher in the near term.

“We maintain our view that scientific and real-world applications continue to be presented in the hydrogen economy, with capital being promoted for this new type of application, thereby creating stronger prominence and highlighting the significance of PGMs in this application,” Tharisa states.

Moreover, the company says the stronger chrome price in the year under review can be attributed to fundamentals of the chrome market and real growth in stainless steel – on the back of solid Chinese demand.

Tharisa continues to deliver on its beneficiation strategy by producing chrome alloy and testing upscaled batteries with a company called Redox One.

The company remains a significant supplier in the chrome market, delivering between 10% and 12% of China’s yearly demand for the metal.

With the stainless steel market in the Far East region demanding close to two-million tonnes of chrome concentrate a month, as well as the industry growth being projected at 3% a year, the fundamentals for chrome remain strong, Tharisa comments.