Tharisa endured a significantly tougher start to its 2025 financial year, with output of chrome and platinum group metals (PGM) down, impacted by erratic availability of drilling equipment while pricing weakness for its commodities persisted despite of supply and demand deficits.
Chrome production for the quarter to December fell from about 47 000 tons in the September 2024 quarter to about 374 000 tons against the backdrop of average metallurgical grade chrome concentrate prices dropping from $314 (R6013) per ton to $271 per ton.
PGM production for the company also sagged from 37 000 ounces in September quarter to 30 000 ounces in the December quarter. PGM prices for the last quarter averaged $1 381 per ounce compared to $1 370 per ounce in the earlier quarter.
Tharisa attained a PGM feed grade of 1.39 grammes per ton compared to 1.56 grammes per ton in the previous quarter while recoveries at 61.7% were lower compared to 70.6% in the September quarter. Chrome grades for the December 2024 quarter stood at 16.9% compared to 18.2% in the September quarter against the backdrop of a recovery rate of 65.7%.
Phoevos Pouroulis, the CEO of Tharisa, described the quarter to December 2024 as “undoubtedly a tough start to the new year impacted by drilling equipment” availability. As a consequence of this, Tharisa had “mined sub optimal oxidised reef horizons” that “yielded lower run of mine grades and therefore lower” recoveries.
“We have subsequently improved the drilling rates and equipment availability. The focus this quarter will be on optimising the feed grade and improving our recoveries to previous levels,” he said.
Pouroulis added that while Tharisa had seen a drop in the chrome price due to slowing stainless steel demand, the company holds the view that current price levels are unsustainable and will need to correct to meet expected demand.
Physical demand for chrome had, however, remained at normal levels with port stocks approximating one month supply to ferrochrome demand. Disruptions at the Mozambique border due to the civil unrest in the neighbouring country and lockdowns had impacted road transport to the port of Maputo, affecting delivery of cargo to end use customers.
“The PGM pricing environment remains stubbornly weak notwithstanding sound demand fundamentals,” he said.
Tharisa also said the PGM price weakness was compounded by “a visible lack of investor interest, despite the supply demand” evidence.
The low pricing environment will lead to growing deficits as output continues to decline, particularly in marginal deep level mines, with capital spend constrained,” it said.
The cybersecurity incident that Tharisa experienced last month had “not directly impact physical operations” but impacted “the administrative, accounting and support services” although solutions were now being implemented to minimise any disruptions.
Tharisa has set a PGM production guidance for FY2025 of between 140 000 ounces and 160 000 ounces. In terms of chrome, the company has set a full year target of between 1.65 million tons and 1.8 million tons in chrome concentrates
BUSINESS REPORT