Platinum Group Metals Signs MoU with Saudi Arabia for PGM Processing Facilities
Platinum Group Metals, a Canadian company focused on developing the Waterberg Project in South Africa's Limpopo province, has signed a memorandum of understanding (MoU) with Saudi Arabia to construct a platinum group metals (PGM) processing facility in the Kingdom. The MoU was signed with Ajlan & Bros Company for Mining and the Ministry of Investment of Saudi Arabia. It aims to explore the construction of a smelter and a base metals refinery, which will be supplied with PGM concentrate from the Waterberg Project, scoped to produce an average of 353,208 ounces of PGMs annually.
This agreement forms part of Saudi Arabia's Global Supply Chain Resilience Initiative, with the facilities to be located in the Kingdom. It builds upon an earlier cooperation agreement signed between the parties nearly a year ago. According to the MoU, other sources of PGM concentrate, including end-of-life autocatalysts and petrochemical catalysts from the Gulf region, could also be processed at the proposed facility. In the long term, mined PGM concentrate from Southern Africa may be considered if available.
The cooperation agreement also outlines plans for a definitive feasibility study (DFS) for the facility and the formation of a 50:50 joint venture to own the assets. Platinum Group Metals has noted that a key requirement before construction can begin is obtaining long-term approval for the export of unrefined precious metals from South Africa—a point of contention, as the South African government typically discourages exporting unrefined minerals that could be processed domestically.
The smelting and refining pipeline in South Africa faces challenges, including limited base metals refining capacity. Potential local smelting and refining options, such as Impala Platinum's Impala Refining Services (IRS), have faced difficulties in finalizing concentrate offtake agreements, even though Implats holds a 14% stake in the Waterberg Project. This constrained pipeline, combined with several new PGM mining projects—including Ivanhoe's Platreef and Southern Palladium's planned mine—compounds the need for additional refining capacity.
Platinum Group Metals has been collaborating with the South African government to identify beneficiation opportunities within the country and to assess the impact of exporting concentrate on the domestic value chain. The September update to the Waterberg Project feasibility study showed an increase in mineral reserves and minimized capital costs, which now stand at $946 million—up from $874 million estimated in the 2019 DFS. These updates have also lowered overall project costs and improved orebody continuity.
