Amplats Rethinks Growth Amid Declining PGM Prices

Amplats Rethinks Growth Amid Declining PGM Prices

Transitioning the Mines

Amid declining platinum group metal (PGM) prices, Anglo American Platinum (Amplats) is revisiting its growth plans, especially its transition from open pit to underground mining at its Mogalakwena mine in Limpopo. New CEO Craig Miller remains optimistic about PGMs despite a significant drop in prices since the beginning of 2023. The company has invested R4bn in exploratory efforts, with the previous leadership suggesting a shift to underground mining by late 2024.

Economic Pressures and Price Drops

While Miller acknowledges the mine’s rich ore reserves, he emphasizes a calculated approach to capital investment. The past few months have seen the company’s earnings plummet, with palladium and rhodium being the hardest hit. External factors, like stockpile buildup in 2022 due to fears of Russia sanctions, and the rising popularity of battery electric vehicles, have pressured PGMs’ primary applications.

Optimism in the Hydrogen Economy

Despite these challenges, Miller remains hopeful for PGMs’ future, particularly given their pivotal role in the burgeoning hydrogen economy. He emphasized the growing interest in hydrogen-related projects and the potential revolutionary impact of hydrogen fuel cells in the automotive sector.

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