Valterra’s First-Half Profits Decline Due to Rain-Impacted Production

Valterra Platinum Ltd. has reported a staggering 91% drop in profit for the first half of the year. This significant decline is attributed to production cuts following flooding at a crucial mining site, along with associated costs from its recent separation from Anglo American Plc.

Based in Johannesburg, the mining company reduced its interim dividend to 2 rand per share, marking a 79% decline compared to the previous year. This announcement followed the release of their financial results on Monday and coincided with Valterra’s official separation from Anglo, which was finalized at the beginning of June alongside a secondary listing in London.

The flooding had a significant impact on production at Valterra’s Amandelbult operation, reducing output by 45% in the first half. Despite this setback, the company remains optimistic and aims to achieve its annual target of refining between 3 million to 3.4 million ounces of platinum-group metals. Amandelbult stands as the second-largest mine in Valterra’s portfolio, following Mogalakwena.

After the heavy rains in February, the affected section of Amandelbult resumed operations in June. Valterra expects to achieve normal production levels in the current quarter as conditions stabilize.

During the initial six months of the year, refined platinum-group metals production fell by 22% to 1.4 million ounces. This decline resulted from limited concentrate availability and a scheduled stock count that occurs every three years.

Valterra, along with other mining companies in South Africa—the world’s leading platinum producer—has been facing a prolonged downturn in platinum-group metal (PGM) prices. However, recent trends indicate a potential turnaround, with platinum and palladium prices surging by 56% and 37% respectively this year, most notably since early May.

The rise in platinum prices over the first half of the year has been supported by a more favorable macroeconomic environment. Increased purchasing from China, particularly driven by renewed interest from local jewelry makers and investors, has coincided with a period of diminished supply from South Africa.

(Updates with information throughout)

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