Platinum group metal (PGM) miner Valterra Platinum, previously Anglo American Platinum (Amplats), expects to report a 76% to 88% year-on-year decrease in headline earnings and headline earnings per share (HEPS) for the six months ended June 30 on the back of a 25% year-on-year decrease in PGM sales volumes and R1.4-billion in one-off demerger costs.

As such, headline earnings are likely to be between R800-million and R1.6-billion, compared with the R6.5-billion reported for the first half of 2024, while HEPS are expected to be between R3.05 and R5.90, compared with the R24.56 reported for the prior comparable period.

Basic earnings and earnings per share (EPS) for the period are expected to also have decreased, by between 86% and 98%. 

Basic earnings are likely to be between R100-million and R900-million, compared with the R6.3-billion reported for the first half of 2024, while EPS are expected to be between 49c and R3.43, compared with R24.02 in the prior comparable period.

Basic earnings were further impacted by a R900-million, or R2.50 a share, asset scrapping, mainly relating to the design and engineering work for the sulphur dioxide abatement plant at Mortimer Smelter, following the decision to place the smelter on care and maintenance.

The decline in earnings was partially offset by cost savings of R2.1-billion, Valterra notes.

The company, which will publish its interim results on July 28, was formed through Amplats’ demerger from diversified miner Anglo American, completed last month.

The decline in sales volumes reflects lower refined production as a consequence of lower metal-in-concentrate (M&C) production, the drawdown of excess work-in-progress in the prior period and the three yearly stock count at the Precious Metals Refinery, Valterra points out.

Production at Valterra’s own mines for the period, excluding Amandelbult, was in line with that of the prior period.

Valterra says it remains on track to deliver M&C production within guidance for the full-year after factoring in the impact of flooding at Amandelbult, albeit at the lower end of the guidance range.

The full-year refined production guidance of three-million to 3.4-million PGM ounces remains unchanged.

M&C production from Valterra’s own operations is expected to be about two-million PGM ounces and PGM concentrate (POC) between one-million and 1.2-million PGM ounces for the full-year.

QUARTERLY PRODUCTION

Valterra reports 464 100 oz of M&C for the second quarter ended June 30, a decrease of 15% compared with that produced in the second quarter of 2024, primarily owing to lower production from Amandelbult, in Limpopo, following the floods experienced in the province, in February.

All mining operations at Amandelbult have resumed and the full-year production is expected to be between 450 000 oz and 480 000 oz, a decrease from 580 000 oz in the 2024 full-year.

“The repair and recovery work at Amandelbult has progressed well and in line with our expectations. Dishaba mine and Tumela Upper restarted in April and Tumela Lower was successfully recommissioned in June and remains on track to be at steady-state in the third quarter,” CEO Craig Miller informs.

Meanwhile, purchase of POC increased by 2% to 304 900 oz, owing to higher third-party receipts, as well as higher production from the Modikwa joint operation (50% POC).

Refined PGM production (owned production, excluding tolling) decreased by 12% year-on-year to 954 000 oz as a consequence of lower M&C production owing to the significant rainfall and flooding that disrupted operations at Tumela mine at Amandelbult and a larger drawdown of excess work-in-progress inventory in the prior period.

PGM sales volumes (from production, excluding sales from trading) decreased by 22% to 981 500 oz, in line with lower refined production.

In the prior period, sales were further supported by a higher draw-down of finished goods inventory, Valterra explains.

On a like-for-like basis, PGM sales decreased by 17%.

The company recorded one work-related fatality at Unki mine in April, when Felix Kore lost his life in a mobile equipment-related incident.

“On behalf of the entire Valterra Platinum team we convey our sincerest condolences to Mr. Kore’s family, friends and colleagues. The team has thoroughly investigated the cause of the incident, and we have implemented measures throughout the entire business to prevent a similar occurrence,” Miller says.

The total recordable injury frequency rate improved to 1.28 per million hours at own operations, down from 1.48 per million hours in the prior period.