In the space of 18 months, RBPlat has fallen from record earnings into a loss. In March 2022, the mid-tier and black-owned PGM producer delivered record-high profits for the 2021 financial year, posting an 86% surge in headline earnings to almost R6.5-billion. 

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The results it unveiled on Tuesday were far more subdued. Headline earnings for the first half of 2022 fell 115% to a loss of R330.3-million.

“The operating environment for the first half of 2023 was characterised by a decline in the basket price combined with ongoing inflationary pressure on the operating costs of the business,” RBPlat CEO Steve Phiri said in a statement. 

Production was also lower, a consequence of operational issues and falling grades at the company’s Styldrift mine. 

Impala Platinum (Implats), which recently acquired over 90% of RBPlat after a protracted tug-of-war with rival Northam Platinum, announced on Tuesday that it has now acquired 100%. RBPlat’s JSE listing will now cease on Wednesday.

Implats is not suffering from a case of buyer’s remorse. All PGM producers are currently nursing a hangover after the prices of rhodium and palladium came crashing back to earth. In early 2021, rhodium was fetching over $29,000 an ounce at one point. It is now hovering around $4,200 an ounce. 

The acquisition of RBPlat is, for Implats, part of a long-term strategy, and on the roller coaster ride of global commodity markets, you take your losses on the chin and wait for profits to return. 

RBPlat operations also lie adjacent to Implats’ Rustenburg operations, offering synergies and a safety valve in an area that has in the past been a flashpoint of violent labour unrest. 

“They look at this as long term … Implats in the coming four or five years are going to have some of their older shafts close. And no one wants to say it out loud, but I suspect that if they can rejig RBPlat, they can retrench fewer people,” Bruce Williamson, a mining analyst at Integral Asset Management, told Daily Maverick.

Overall, RBPlat’s poor performance is a reflection of the wider PGM sector, with its loss perhaps a symptom of its relatively small size. Anglo American Platinum (Amplats) last week reported a sharp fall in interim earnings, though it still posted a profit. 

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“This is a classic squeeze. PGM miners, when those prices were going crazy, were making insane amounts of money. Now rhodium and palladium have literally collapsed,” Williamson said. 

PGM prices have been undermined by a perfect storm of bearish events including slowing global economic growth and a push to electric vehicles in key markets such as Europe and China, which is reducing demand for rhodium and palladium as catalysts in internal combustion engines. 

The consequences go far beyond the shafts and portfolios of investors in PGM mining stocks. 

The record prices and profits seen two years ago threw a lifeline to the South African Treasury as PGM producers and other miners also paid record amounts of tax and royalties. 

South Africa’s economy this year is expected to barely grow in the face of the power crisis and other headwinds, and there is no commodity cushion for government coffers this time round. 

Having by far the world’s biggest PGM reserves is not exactly a curse, but it’s not always a blessing either. DM