Floods, Spinoff Costs and EV Anxiety: SA’s New Platinum Player Struggles Out the Gate

Valterra Platinum’s Big Wake-Up Call

Valterra Platinum, South Africa’s shiny new mining heavyweight, has had a rough start since its dramatic spinoff from Anglo American in June. The company announced this week that profits for the first half of 2025 likely dropped by a staggering 98%, dragging with it hopes of a smooth solo debut.

That’s not just a paper cut. That’s a deep wound and it’s a tough pill for a country already grappling with a volatile mining industry.

From Anglo Legacy to Stormy Start

Valterra, which until recently was known as Anglo American Platinum, emerged from Anglo’s big breakup strategy as the proud new flag-bearer of South Africa’s platinum industry. But almost immediately after stepping out on its own, it ran into a perfect storm, literally.

Back in February, heavy rains and severe flooding crippled operations at its Amandelbult mine, one of its major production hubs. That weather setback sliced into output and helped push sales volumes of platinum-group metals (PGMs) down 25%.

As if nature hadn’t done enough damage, Valterra also had to fork out R1.4 billion in once-off demerger costs linked to its separation from Anglo. Add it all up, and it’s no surprise the books are bleeding.

PGM Prices Rising, But Is It Enough?

Despite all the drama, there’s a glimmer of light in the gloom. Platinum and palladium prices are on the upswing – up 58% and 43% respectively this year, mostly since May. Some market watchers are starting to whisper the word “deficit” again, with UBS analysts noting that the recent rally has pushed the PGM basket price “above cost support.”

That sounds promising, especially for a market that’s been in the doldrums for years. But optimism is tempered by uncertainty — particularly around the electric vehicle (EV) revolution. Unlike traditional combustion engines, EVs don’t need PGMs, which raises existential questions about future demand.

For now, though, industrial use and a rebound in jewelry sales in China are keeping hope alive.

Staying the Course, But Barely

Valterra says it’s still on track to hit its annual refined production goal of 3 to 3.4 million ounces, although it’s likely to land on the lower end of that range.

And it’s not all doom and gloom: the company managed to save R2.1 billion in costs during the period, offering a bit of a cushion against the steep earnings drop.

Investors, interestingly, seem to be shrugging off the bad news. Valterra’s shares climbed as much as 5.5% in Johannesburg after the update, and the stock has gained about 24% since the demerger. That suggests some market confidence in the miner’s long-term potential, despite the messy start.

A Fragile Giant in a Changing World

Valterra’s story so far reflects the broader uncertainty gripping South Africa’s platinum industry. The country remains the world’s largest PGM producer, but it’s navigating climate disruptions, structural shifts in global demand, and the legacy of mega-mining conglomerates carving themselves into leaner, more focused entities.

In local mining circles, there’s a growing sense that the days of platinum being a guaranteed money-maker are over. Survival now depends on nimbleness, innovation, and, increasingly, resilience to climate shocks.

For Valterra, the next six months will be critical. With the worst of the flooding behind it and prices inching up, it has a narrow but real opportunity to steady the ship. But whether this new giant can stand on its own two feet or get swept away by market currents is still an open question.

One thing is clear: in South Africa’s high-stakes mining game, even giants bleed.

{Source: BusinessTech}

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