Shares in platinum group metal miner Tharisa (THS) gained 2.75% to 128.4p as it stuck to its annual production guidance amid soaring prices for platinum, palladium and rhodium.
The miner’s share price has jumped from around 70p at the start of November thanks in part to a staggering rise in the price of rhodium and platinum, two metals which had a strong 2020 with the former currently trading at an all-time high.
For the three months to the end of December, the firm's output of 6E platinum group metals (PGMs) - platinum, ruthenium, rhodium, palladium, osmium and iridium - rose by 14% year-on-year to 39,300 ounces from 34,400 ounces the year before, but down 3% from 40,500 ounces the previous quarter.
Looking ahead, the miner maintained its annual production guidance of between 155,000 ounces to 165,000 ounces of 6E platinum, and 1.45 to 1.55 million tonnes of chrome concentrate.
SOARING PRICES
It comes as the price of PGMs has soared, with the likes of rhodium jumping more than 200% from their lows in March to a whopping $18,840 per ounce - a staggering $14,000 more than the price two years ago - and platinum rising around 100% in the same timeframe.
Tharisa achieved an average basket price of $2,399 per ounce for PGMs in the quarter ended 31 December 2020, a 22.9% rise on the previous quarter and a 70.6% jump on the same quarter a year ago.
Rhodium prices in particular have soared due to supply constraints thanks to the pandemic coupled with their use in catalytic converters, with car companies in Europe and Asia needing to use ever more amounts of rhodium to meet stringent clean-air legislation.
Rhodium’s effectiveness in absorbing harmful nitrogen oxide means it’s a lot harder for car companies to substitute than the likes of platinum and palladium.
SOARING PROFITS
Such soaring prices have also fueled rocketing profits for Tharisa in its last financial year, with Tharisa last month reporting a 577% rise in pre-tax profit to $75.8 million for the year to 30 September 2020 and hiking its final dividend by 367% to 3.5 US cents.
Speaking to Shares, Tharisa’s chief executive Phoevos Pouroulis said that even if PGM prices were at half the level they currently are the firm would still generate ‘strong margins’ due to its open-pit mine and low cost mining methods, but thinks prices could remain elevated over the ‘medium term’.
He said, ‘This higher pricing environment is sustainable on the back of emission control legislation and the huge drive to decarbonize the economy.
‘Beyond the internal combustion engine, there is a second tier of demand from fuel cells and the hydrogen economy. We may see some volatility [in PGM prices], but generally speaking we see this higher pricing environment being sustainable over the medium term.’
