Platinum miners favour payouts over projects even as prices surge

About this update from Valterra Platinum Limited

By Olivia Kumwenda-Mtambo and Nqobile Dludla Platinum's run to record highs will need to be sustained for miners to invest heavily in new projects, with executives signalling they plan to prioritise shareholder payouts for now amid concerns over past missteps and rising costs. After years of margin pressure that forced deep cost cuts and mass layoffs, the rebound in platinum prices — with spot platinum NYMEX:PL1! hitting a record $2,918.80 per ounce in January after surging 127% in 2025 — has lifted miners' fortunes.Valterra Platinum JSE:VAL, the world's biggest platinum producer by value of sales and spun off from Anglo American LSE:AAL last year, expects annual profit to jump by as much as 106%. Impala Platinum JSE:IMP has forecast half-year profit growth of up to 392%.But that doesn't mean a spending spree is coming."We're still maintaining our discipline, being really disciplined around executing what we can control within the business and then making sure that whatever additional value that we create, we return it back to shareholders," Valterra CEO Craig Miller told Reuters on the sidelines of a mining conference in Cape Town.Valterra plans to keep its 40% dividend payout policy. Zimplats, Zimbabwe's largest platinum producer and majority owned by South Africa's Impala, is also preparing to reward shareholders after they backed the company's 10-year, $1.8 billion expansion plans announced in 2021."We certainly look forward to an opportunity where we can reward them, in terms of giving them a dividend," Zimplats CEO Alex Mhembere said. Zimplats last declared a dividend in the financial year ended June 2023.NEW OUTPUT CAUTION Despite strong prices, mining executives are wary of launching new projects without evidence of sustained long-term platinum group metals (PGM) price stability, as costs are still weighing heavily. "PGM prices today are not far off what we think is that price that you'd be able to earn a reasonable return on a new mining project," said Valterra's Miller, adding he would prefer a period of consistently higher prices to support greenfield development.He said past platinum booms triggered unsustainable investment, noting that probably only two of 20 projects launched by the industry between 2005 and 2010 remain operational.Miller cited sustained prices of $2,300 to $2,500 per ounce as a reasonable range for long-term planning.Hilton...

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