By Nelson Banya and Felix Njini
(Reuters) – South Africa’s output of platinum group metals (PGM) should rebound in 2024 as the country starts to recover from a power crisis that will cut its production by as much as 20% this year, Neal Froneman, CEO of miner Sibanye Stillwater, said.
South Africa, the world’s top PGM producer, is currently experiencing blackouts blamed on the frequent breakdowns of its ageing thermal power plants. State-owned utility Eskom is implementing lengthy routine power cuts, known locally as load shedding, in order to manage the generation deficit.
The World Platinum Investment Council has forecast a global deficit of nearly 1 million ounces of platinum this year, while palladium the other major PGM metal, is also seen in deficit, largely due to South Africa’s energy problems and sanctions-related operational challenges in world number two producer Russia following its invasion of Ukraine.
Froneman told Reuters in an interview late on Wednesday that he expects a newly forged collaboration between South Africa’s government and business leaders to address the country’s infrastructure problems and reverse the slide.
Business leaders recently met President Cyril Ramaphosa and agreed to support the government’s plans to expand the country’s power generation capacity.
“I think you will start seeing an improvement in load shedding, moving into next year. I think the operational disruptions next year will be lower,” Froneman said, adding that an electricity minister appointed recently by Ramaphosa was doing “a great job”.
“I actually think we are at the start of a turnaround. I see government far more willing to embrace business and work together with us in addressing energy, transport and logistics, and crime and corruption,” Froneman said.
Froneman said Sibanye expects its PGM output to decline by between 5% and 10% this year, with South Africa’s overall production being down by between 15% and 20%.
Sibanye’s output declined 10% in January-March from a year earlier, while its peers Anglo American Platinum and Impala Platinum reported 13% and 10% declines in production, respectively, during the same period.
(Reporting by Nelson Banya; Editing by Susan Fenton)