JOHANNESBURG (miningweekly.com) – China is probably leading the global hydrogen fuel cell advance, journalists heard at Thursday’s media briefing that followed the “commendable” half-year performance of the Johannesburg Stock Exchange-listed Impala Platinum (Implats), which generated free cash flow of R639-million in the first six months its 2025 financial year (FY2025).

Having already identified Europe as a favourable driver of the gradually progressing platinum group metals- (PGM-) based green hydrogen fuel cell economic future, at question time Implats group executive corporate relations Johan Theron also singled out China's leading role in the green hydrogen fuel cell field, along with key roles being played by Japan and South Korea.

The interim results highlighted a tightening demand for PGMs, driven by electrification and diverse applications.

Palladium and rhodium, primarily used in auto catalysts, face challenging market supply dynamics, while platinum's robust demand from industrial and jewellery sectors offsets auto catalyst declines.

Canadian operations, exposed to palladium and rhodium, face challenges, with a 15% reduction in production volumes.

Marula's performance is constrained by geological complexity and higher panel loss rates.

Having adjusted the operating parameters at several of its assets in response to continued low rand pricing for PGMs, Implats maintained a strong and flexible balance sheet.

The company, headed by CEO Nico Muller, generated half-year earnings before interest, taxes, depreciation and amortisation of R6.5-billion and headline earnings of R1.85-billion, closing with a net cash balance of R6.7-billion and liquidity headroom of R17.8-billion.

Moreover, Implats is on track to deliver within previously provided FY2025 guidance, despite water and power interruptions and Impala Bafokeng suffering safety stoppages following loss-of-life accidents amid steadfast safety improvement commitment.

Zimplats in Zimbabwe scaled up to full solar power of 35 MW as part of a planned 185 MW solar complex, and attained technical completion of its smelter expansion as well as the first phase of its sulphur dioxide abatement project. In South Africa, Impala Refineries’ base metals refinery debottlenecking project was delivered.

Operational planning and capital investment are structured to enhance the competitive positioning of each asset to maximise returns amid the weak rand PGM pricing resulting in sustained pressure on operating margins.

OUTLOOK AND GUIDANCE

Production in FY2025 is poised to be supported by strong delivery at Impala Rustenburg, Impala Bafokeng, Mimosa and Two Rivers, together with the expected partial unwind of accumulated inventory at Zimplats, countering the tapering production profile at Impala Canada and weak performance at Marula.

Third-quarter smelting rates have been constrained by required maintenance and repairs at two Impala Rustenburg furnaces, which will moderate the pace of excess inventory destocking.

Six element (6E) refined and saleable production and unit costs guidance are maintained at between 3.45-million and 3.65-million ounces and between R21 000/6E oz and R22 000/6E oz.

The capital expenditure forecast for FY2025 has been lowered to between R7-billion and R8-billion, including growth capital of between R1.0-billion and R1.2-billion.

Platinum, palladium and rhodium are expected to remain in deficit in 2025.

Mining Weekly: What is driving the tightening of demand for platinum, palladium and rhodium?

Theron: It's always important to talk about these metals individually, and also what time period we refer to, so if we talk about the present, where we find ourselves right now, these metals have been in deficit, and they continue to be in a deficit, and we continue to see strong buying from our customer base. But if you look forward, the dynamic is slightly different for each one of these metals. Palladium and rhodium are preferentially used in auto catalysts, and with more electrification down the line, that will impact the market supply dynamic of those two metals. Platinum is much more diverse. About a third is used in industrial applications, a third in catalysts, and a third in jewellery and investment and we’re seeing continuous growth in those areas, except for the autocat and platinum, that have the same dynamic. But because platinum is less exposed than the other two metals, and you have growth in the other two areas, platinum’s dynamic is a lot more robust. The final thought is that you also need to consider available metal and how that has changed over time when it comes to availability on surface. We have seen a draw down to palladium and rhodium over recent years with the use of those metals, specifically in China, and in gasoline cars, and they're actually at very low levels still. To any extent, that investor sentiment or customer interest changes, because the markets are quite thin for those two metals, you should see a price response. Platinum has been drawn down, but the levels available are still higher than for the other two metals. But with its stronger deficit dynamic, platinum will also draw down on those inventories, and it's our contention that we’re nearing a point where that will start manifesting itself in price support.

Given your Canadian operation, are there any PGMs exported by you from Canada into the US that could be exposed to the latest import tariff imposition?

The answer is no. Our Canadian metal is supplied to one of the PGMs and copper/nickel processors. We sell directly to them, and then they have the responsibility to then sell that metal onwards to their own customer base, so our Canadian metal will not be sold by us into the US. We do sell from South Africa into the US. Tariffs are very topical, but I think it's still early to see quite how that dust is going to settle. But as we speak today, none of our sales is impacted by tariffs.

It was mentioned that Europe is favourable from a potential future hydrogen fuel cell demand aspect, although some in Europe state that Japan and Korea are ahead of Europe when it comes to the hydrogen fuel cell economy, particularly Japan. Is that your view as well?

I would argue that China is probably leading right now. What makes Europe unique is that they've got a very acute energy issue with the conflict, and having lost access to Russia. They've also shut down nuclear and coal, so as a consequence, they’ve got to look deeper into the future, and they've made a very strong commitment into renewable energy, one being hydrogen. Certainly  policy and incentivisation are upcoming driving forces that could really push the hydrogen agenda forward and hopefully catch up with China, Japan, Korea, some of the countries that lead in that space.

OPERATIONAL PERFORMANCE

Tonnes milled at managed operations decreased by 4% to 13.74-million tonnes, owing primarily to lower throughput at Impala Canada and Marula.

Milled grade benefited from initiatives implemented at Impala Rustenburg and improvements at Zimplats and Impala Bafokeng, rising 1% to 3.80g/t.

In total, 6E production decreased by 4% to 1.82-million. Managed operations’ 6E volumes declined by 5% to 1.44-million ounces, mainly as a result of lower throughput at Impala Canada and Marula and the accumulation of in-process inventory at Zimplats during the commissioning of the expanded furnace complex.

Production from joint ventures increased by 2% to 282 000 ounces, with Two Rivers benefited from improved operational delivery at the upper group two operations, and Mimosa delivering higher volumes, notwithstanding intermittent regional power disruptions.

Concentrate from third parties fell 9% to 103 000 ounces and refined 6E production, which includes saleable ounces from Impala Bafokeng and Impala Canada, increased by 2% to 1.79-million on increased available processing capacity.

Implats ended the first half of FY2025 with 375 000 pounces of inventory.