Miners are loath to boost production as it could result in a platinum surplus and lower prices
Miners in SA face a conundrum: increasing palladium and rhodium output to take advantage of soaring price risks depressing the already fragile market for sister metal platinum.
Consequently, some of the world’s biggest platinum miners, including Sibanye Gold and Impala Platinum Holdings, are loath to boost production, even as palladium’s eight-year supply deficit could widen in 2020. Platinum has rallied 15% this year from a decade low, but demand is forecast to drop in 2020, pushing the market back into a surplus. Palladium has jumped 40% in 2019, while rhodium has surged 144%.
The rally in palladium and rhodium is extending the life of older shafts along Rustenburg’s platinum belt, but producers are not rushing to invest in new mines, according to Johan Theron, a spokesperson for Implats. Boosting production would make the platinum market “even more supplied,” he said.
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