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Tharisa maintains good PGMs production despite quarter-on-quarter drop in production

12th April 2022

By: Darren Parker

Creamer Media Contributing Editor Online

     

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LSE- and JSE-listed platinum group metals (PGMs) and chrome producer Tharisa reported a decrease in production at its Tharisa mine in South Africa in the second quarter, ended March 31, compared with the first quarter of its current financial year, but said the rate was still at record levels.

In a statement on April 12, Tharisa said the mine’s PGMs production for the second quarter was 44 100 oz, down 7.5% from the 47 700 oz produced in the quarter ended December 31, 2021.

The company said the lowered production was offset somewhat by an improved average PGMs basket price, which increased by 17.2% to $2 806/oz, compared with $2 394/oz in the first quarter.

Chrome production also decreased to 374 900 t, 6.7% lower than the 401 800 t produced in the first quarter.

Again, the company benefitted from an improved average metallurgical grade chrome price, which increased by 9.9% to $177/t, compared with $161/t in the previous quarter.

Tharisa CEO Phoevos Pouroulis said that, despite the production challenges in the second quarter, PGMs and chrome concentrate production increased by 22.2% to 91 800 t and 6.3% to 776 700 t, respectively, on a half year comparable basis to last year.

“Mining rates remain at record levels, with production being impacted by certain secondary mill challenges which have since been addressed. These challenges dampened throughput and in turn production.

“This quarter’s output, though slightly lower, needs to be measured against our record-breaking quarterly run rate and our step change to higher output remains intact on a [yearly] basis,” he commented.

Tharisa said the production guidance for the financial year of between 165 000 oz and 175 000 oz of platinum, palladium, rhodium, ruthenium, iridium and gold and 1.75-million to 1.85-million tons of chrome concentrate remains unchanged.  

The mechanised Tharisa mine has a 20-year opencast pit life and the ability to extend operations underground by at least an additional 40 years.

VULCAN

Meanwhile, the company continued with its gradual ramp-up of its R1-billion Vulcan ultra-fine chrome recovery and beneficiation plant at the mine, which began the cold commissioning process in October last year. Tharisa reported that the plant’s ramp-up had gone slower than forecast, but that it reached higher levels in March, with the daily target output due to be reached during the current third quarter.

Vulcan is the first large-scale plant to produce chrome concentrates from chrome ultra-fines.

The Vulcan technology was developed entirely by Tharisa subsidiary Arxo Metals, which conducts Tharisa’s in-house research and development for the extraction of ultra-fine chrome from tailings.

When fully commissioned, the Tharisa mine is expected to materially increase its chrome recoveries by about 20%.

The plant, which processes live tailings produced by the independent Voyager and Genesis plants, will allow for further beneficiation of the company’s chrome production at the mine.

OTHER ASSETS

Tharisa also now owns a 66.3% controlling interest in PGMs producer Karo Mining Holdings. It acquired an increased shareholding during the quarter by exercising a farm-in option at a discount to the project’s net present value for $27-million.

The company thereafter appointed Bernard Pryor as Karo MD.

Karo’s principal asset is a development stage, low-cost, openpit PGMs project located on the Great Dyke in Zimbabwe.

Tharisa said an implementation study at Karo had proved the robust economics of the first phase of the project, while still presenting significant growth opportunities.

The company also owns the nearby Salene chrome asset, where plant commissioning is currently under way. Production is scheduled to start during the current quarter.

MARKETS

Tharisa said the PGMs market was driven by two forces. One of these forces was structural, where demand for all metals remained strong, pushing prices up as the market absorbed potential inventory overhangs from the last 12 months. This came as the global pipeline for automobiles and computer chips grew and general economic activity increased.

The second force, the company said, was the impact of geopolitical events, which resulted in buyers working to ensure access to metal supply owing to uncertainty of supply from Russia.

Tharisa said these concerns were warranted because the latest sanctions by the London platinum and palladium market on certain refiners indicates that the market will tighten, although demand from certain countries still trading with Russia is being met by its output for now.

The company said that, unless there was a significant drop in economic activity, prices and the outlook for the next 24 months and the longer term remained firmly intact.

Meanwhile, higher chrome prices for the second quarter were in line with global trends for commodities, Tharisa noted, with strong demand supported by lower pipeline inventories and increased consumption.

Despite continued logistical challenges for both inland and sea freight, Tharisa said it was able to deliver to its order book with inventory on hand at normal levels.

“Prices remain healthy but we are of the view there are too many headwinds to incentivise new production thus maintaining the current supply/demand balance, which at this stage, may be weighted to a slight deficit,” the company concluded.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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