THE World Platinum Investment Council (WPIC) says Zimbabwe’s platinum output took a hit in the third quarter of 2024, slumping 5% year-on-year to 126 000 ounces, according to its latest data.
In a quarterly report for the third quarter of 2024, WPIC chief executive officer Trevor Raymond said the decline was primarily attributed to the commissioning of the expanded Zimplats smelter, which led to a build-up of semi-finished inventory and impacted refined output.
Platinum is Zimbabwe’s second-largest mining export after gold.
Mining is strategically important to Zimbabwe, as it generates more than 75% of the country’s export earnings.
Other mineral exports include chrome, diamonds, lithium and coal. According to GlobalData, Zimbabwe was the world’s third-largest producer of platinum in 2023, with output up by 6% from 2022.
“In Zimbabwe, output declined by 5% year-on-year to 126 koz, primarily due to the commissioning of the expanded Zimplats smelter,” Raymond said. “While mined output remained steady, the smelter’s commissioning led to a build-up of semi-finished inventory, impacting refined output.” He noted that despite mined output remaining steady, the smelter’s commissioning woes took a toll on the country’s platinum production.
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In contrast, global platinum supply surged 5% year-on-year in the third quarter of 2024, driven largely by South Africa’s improved smelter availability.
“Total platinum supply increased by 5% year-on-year in the third quarter of 2024. Mine supply increased 7% year-on-year to 1,479 koz in Q3 2024, largely driven by South Africa,” he said.
“The country benefited from improved smelter availability supported by reduced electricity shortages during the quarter which together allowed for a release of work-in-progress inventory and more than offset some processing constraints in Zimbabwe.” During the second quarter of the year, WPIC said Zimbabwe’s output remained stable year-on-year at 125 koz, as a decline at Zimplats was offset by growth at Unki.
He noted that platinum’s market trends are entrenching themselves to support a third year of consecutive deficits, while global demand declined by 11%.
“Platinum demand is proving resilient against the backdrop of global uncertainty while platinum supply shows no sign of returning to pre-pandemic levels as PGM basket prices are not incentivising investment in growth. The result of ongoing deficits is rapidly depleting above-ground stocks, which, are forecast to decline by 40% over the three years to 2025f,” he said.
“Global demand declined by 11% year-on-year to 1,567 koz as a spell of disinvestment and weaker vehicle sales weighed on platinum demand. Industrial demand improved year-on-year, but this comparison is skewed by weakness in Q3’23.”
WPIC said platinum demand in the automotive sector is forecast to decrease by 2% year-on-year in 2024, but is expected to rebound in 2025.
“Focussing on the automotive sector, platinum demand is forecast to decrease by 2% year-on-year in 2024f and increase by 2% year-on-year in 2025f. The drivetrain narrative continues to reflect slowing BEV [battery-electric vehicles] demand growth with consumers preferring the intermediary electrification step of hybrids. The global market share of passenger BEVs is now forecast to increase by a modest 1% from 12% in 2023 to 13% in 2024f,” he said.
“Tellingly, BEV demand growth is expected to re-accelerate in 2025f. As less expensive BEV models are launched and fleet-wide CO2 emission targets penalise ICE-based vehicles, BEV production is forecast to increase by 31% year-on-year. While recent history suggests there are downside risks to BEV growth rates, the negative implication for ICE-based passenger vehicle production (including hybrids) is modest with volumes only falling by 2m [million] units over two-years from 80m units to 78m units in 2025f.”
“Declining volumes are partially offset by vehicle hybridisation (where PGM loadings are higher) and continued platinum for palladium substitution. Elsewhere, platinum demand will benefit from growth in the heavy-duty vehicle segment in 2025f as the market benefits from declining financing costs.”