Global platinum production set to decline this year

Platinum production in South Africa is facing challenges.

After a 1.3% increase in 2023, global platinum output is anticipated to fall by 1.5% in 2024, due to significant challenges confronting major producers in Russia and South Africa. 

Russia, whose platinum production is mainly a by-product of its nickel production, accounted for 12% of global platinum in 2023. However, GlobalData predicts a decline of 10.7% to 599.8koz in Russia's overall platinum production for 2024, due to planned lower output from Norilsk Nickel, the country’s largest producer. The company cites the challenging geopolitical climate and internal factors for its reduced platinum production guidance of 567 to 605koz in 2024, down from production of 664koz in 2023. 

Meanwhile, the South African platinum industry is currently grappling with a multitude of operational challenges that are significantly impacting its output. These challenges include chronic power shortages, rail capacity constraints, and the unpredictable swings in platinum prices. In response to these setbacks, several major producers have been forced to announce restructuring plans. 

For instance, Anglo American Platinum, a leading industry player, unveiled a restructuring proposal in February 2024 that could potentially impact 3,700 jobs across its South African operations. Furthermore, the company has also reduced its production guidance for platinum group metals (PGMs). PGM production is now expected to be in the range of 3.3-3.7moz, down from 3.8moz in 2023 and 4.02moz in 2022. 

Another leading producer, Impala Platinum, has implemented voluntary severance packages as part of its restructuring efforts. Its PGM output for FY2024 is expected to rise, in the range of 3.3 to 3.45moz, an increase of 11.5% to 6.6% compared with 2.96moz produced in FY2023. 

Similarly, Sibanye-Stillwater is implementing a comprehensive restructuring plan to address operational inefficiencies, declining commodity prices, and ensure long-term sustainability. Recent stakeholder discussions concluded regarding the restructuring of four South African PGM shafts, impacting over 4,000 jobs and contractors. The company expects to produce 1.8 to 1.9moz of PGM (4E) in 2024.

Despite the current challenges, platinum production is expected to increase over the decade in South Africa, rising by a CAGR of 1.2% from 2024 to 2030. This will be supported by the long-awaited resumption of operations at the Bokoni Platinum mine in 2024, while the large-scale Platreef project is scheduled to commence production in Q3 2024. With a capacity of up to 228koz, it will become a significant contributor to South Africa's platinum output in the coming years. 

Meanwhile, several established South African mines are poised to increase production in 2024. These include Bafokeng-Rasimone, Impala, Two Rivers, Modikwa, Booysendal South, and Booysendal North. This collective rise will only partially offset potential declines in other areas. 

Outside South Africa, there are two major upcoming projects which will support growth in future platinum production: Canada's Marathon project in Ontario and Zimbabwe's Karo Platinum, both of which are expected to commence in 2025.