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Northam Platinum enjoyed record chrome sales in its latest financial year as it continues to ramp up production at the Eland mine in the Northern Cape.The group reported 1.69-million tonnes of chrome concentrate production, up 17% from the previous year as output from Eland jumped nearly 50% to 308,831 tonnes.The ramp-up of Eland was central to Northam’s growth strategy this year as the platinum group metal (PGM) industry bets on continued growth in chrome markets.Northam bought Eland from mining giant Glencore in 2017 for R175m, acquiring the mine along with a large 250,000 tonnes per month concentrator plant and a fleet of 100 mining vehicles.It took about R2bn to restart the operation back in 2019 and Northam has continued to dedicate significant capital expenditure to ramping up production at the asset, which it expects to become a significant chrome producer in the coming years.South Africa accounts for 26-million tonnes of chrome production, or 61% of global supply, of which 13% is used domestically to make ferrochrome. The remainder is shipped mainly to China and IndonesiaDuring the year to end-June, stoping crews at the mine doubled to 50, ventilation was reorganised to allow for multi-blast mining and surplus ore was brought in from Zondereinde, the group’s oldest mine. All this resulted in a more than doubling in yields at Eland.Across the industry, PGM heavyweights are turning to chrome, a byproduct of the PGM mining process used to make ferrochrome, a steelmaking ingredient, as an increasingly key source of revenue.The need for diversification has been heightened in recent months as PGM prices slump amid concerns of inflation stemming from the Middle East, with the PGM basket price down about 40% since January.Sibanye-Stillwater last month unveiled ambitions to become a top five global chrome recovery company amid expectations of firmer prices.Recent policy intervention in the form of significant tariff discounts for Glencore and Samancor may also be boosting sentiment.Shares in Northam have slumped nearly 30% this year to date, slashing R43bn off the miner’s valueEnergy minister Kgosientsho Ramokgopa hopes that a broader smelter support package, building on the tariff relief offered to Glencore and Samancor, will bring dozens more smelters online in the coming years, revitalising domestic demand.South Africa accounts for 26-million tonnes of chrome production, or 61% of global supply, of which 13% is used domestically to make ferrochrome. The remainder is shipped mainly to China and Indonesia.In a voluntary production update this week, Northam said it expects the primary supply of PGMs to “continue to decline unabated well into the next decade, due to the extended lead times for developing new mines, exacerbated by periodic fluctuations in PGM basket pricing.”“Northam’s operations are high-yielding, quality assets with long operating lives, and our relative market share of primary PGM and chrome production is expected to continue to increase over time,” said the miner.Shares in Northam have slumped nearly 30% this year to date, slashing R43bn off the miner’s value. Investors expect inflation stemming from the war in Iran to narrow profit margins in the PGM industry while also continuing to pressure prices.
