Tharisa’s mill challenges dampen mining production

THARISA, a platinum group metals

(PGMs) and chrome producer, yesterday reported a fall in production for its second quarter to end-March as mill breakdowns were weighing on production, but said it was on track to meet its market guidance.

The JSE- and London Stock Exchange-listed company said its PGMs production for the second quarter was 44100 ounces, a 7.5percent drop from the 47 700 ounces produced in the quarter ended December 31, 2021.

Tharisa chief executive Phoevos Pouroulis said: “Another safe and strong mining performance in what is traditionally our toughest operating quarter. “Mining rates remain at record levels with production impacted by certain secondary mill challenges that have since been addressed. These challenges dampened throughput and, in turn, production.”

Chrome production also decreased to 374 900 tons, a 6.7 percent decrease from the 401 800 tons produced in the first quarter.

Tharisa said it had a cash balance of $101.5 million (R1.5 billion) at the end of the quarter and debt of $75.6m after a final full-year 2021 dividend payment of $14.1m.

The increased cash resulted in a positive net cash position of $25.9m compared to $24.4m for 2021.

The PGM market was driven by two forces, one structural, where demand for all metals remained strong, pushing prices up as the market absorbed potential inventory overhangs from the past 12 months, as the global pipeline for automobiles and computer chips grew, as economic activity was lifted, the firm said.

“The second force, unfortunately, was driven by geopolitical events, that saw buyers ensuring access to metal supply due to uncertainty of supply from Russia.

“These concerns are warranted as the latest sanctions by the London Platinum, and Palladium Market on certain refiners indicates the market will tighten,” it said.

However, the lowered production was counteracted by an improved average PGMs basket price, which increased by 17.2 percent to $2 806 an ounce, compared to $2 394 an ounce in the first quarter.

“This quarter’s output, though slightly lower, needs to be measured against our record-breaking quarterly run rate, and our step change to higher output remains intact on an annualised basis.”

Tharisa’s share on the JSE closed 2.93 percent down at R31.50 yesterday, having risen 50.93 percent in the past three years.