Zambia plans state firm to own 30% of critical minerals mines
The government also intends to make investors in the critical minerals sector allocate at least 35% of procurement costs to local suppliers.
Impala Platinum sees little prospect of new platinum mines being built in South Africa as the industry struggles with a price slump, its chief executive Nico Muller said on Thursday.
Johannesburg-based Impala said projects it had halted in South Africa and Zimbabwe were unlikely to be revived due to the growing market for electric vehicles – which don’t need platinum-group catalysts in their engines.
“It’s highly improbable that you’re going to see material investment in new PGMs (platinum group metals) production in South Africa,” Muller said on a media call.
Impala, which has mines in South Africa, Zimbabwe and Canada, is curbing new investment after headline earnings in the year through June 30 plunged 87% to 2.4 billion rand ($135.4 million).
Impala has also shortened the life of its Canadian palladium operations due to a slump in prices and Muller said investors were balking at spending on new mines, which take as many as 20 years to build.
Platinum, of which South Africa is the world’s top supplier, and palladium prices will continue to hover below $1,000 an ounce this year due to overstocking, according to a Reuters poll.
Platinum was trading around $940.85 an ounce and palladium at $946.16 on Thursday.
Platinum miners are bound by antitrust rules which prohibit them from voluntarily cutting output to stimulate prices, Muller said.
“We are not (as an industry) in a position where we can sit around a cigar table and agree to cut production in order to rebalance the market,” the CEO said. “That is the dilemma we sit with.”
The industry’s plight also reflects “the long-term state of electrification (of vehicles)”, Muller said.
“I’m not convinced that any shareholder or company is going to see a clear and attractive return for development in new assets,” he added.
Impala will place its Two Rivers project on “care and maintenance” after halting a planned 5.7 billion rand investment, in addition to spending curbs at the North Hill project in Zimbabwe where a $134 million investment was initially planned, and job cuts in South Africa.
($1 = 17.7210 rand)
(By Nelson Banya and Felix Njini; Editing by Helen Popper and David Holmes)
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