VALTERRA Platinum said in a trading statement today full year headline earnings for 2025 could double owing to a 26% increase in metal prices and R5bn in cost cuts.
Earnings for the 12 months ended December 31 would come in between R15.6bn and R17.3bn, an increase of between 85% and 105%.
Sales volumes were lower owing to the drawdown of metal inventory built in 2024 as well as “significant flooding” at the Amandelbult Tumela mine in the first half of 2025.
Amandelbult lost about 22% of its production in the first half of Valterra’s financial year – about 100,000 ounces – owing to the flooding. The financial impact was partly offset by a R2.5bn insurance payout.
Other extraordinary costs in Valterra’s 2025 financial year included R1.7bn related to its demerger from Anglo American in May.
Basic earnings were likely to be between R14.5bn and R15.9bn for the year, an increase of between 105% and 125% over 2024.
Valterra registered a R1.9bn ‘scrapping of assets’ charge related to its repurposing of processing facilities at Mortimer Smelter and the Vaalkop Tailings Storage Facility. The latter has been replaced by the Blinkwater Tailings Storage Facility to provide adequate future tailings capacity. Mortimer has been turned into a sulphur dioxide abatement plant.
Since the beginning of the 2026 financial year, the platinum price has gained a further 30% owing to a combination of factors related to new derivative trading in China and a surge to restocking, especially in the US over tariff concerns. There is also evidence that manufacturers remain short of metal. Palladium is nearly 17% stronger while some of the more illiquid miner metals such as rhodium have also surged in price.
This will likely have Valterra management dealing with questions over returns to shareholders versus its working and project capital allocation requirements. Investors may also point to prices this year. “In FY26, Valterra will likely shoot the lights out,” said René Hochreiter, an analyst for Noah Capital in a note today.
UBS said recently South Africa’s PGM sector will produce a tripling free cash flow this year to about R1.7bn ($105bn).
Bank of America has raised its average 2026 platinum and palladium expectations to $2,450/oz from $1,825/oz and to $1,725/oz from $1,525/oz, respectively. “We continue to expect platinum to outperform palladium, underpinned by persistent market deficits,” its analysts say.