Platinum’s surge to record prices has boosted miners’ profits, but executives say the rally needs to last much longer before they commit to major new investments, with most companies choosing to prioritise dividends and shareholder returns for now amid lingering cost pressures and lessons from past overexpansion, Reuters reported.
After years of weak margins that led to sharp cost cuts and widespread job losses, the rebound in platinum prices has significantly improved miners’ financial positions.
Spot platinum hit an all-time high of $2,918.80 per ounce in January after jumping 127% in 2025.
Valterra Platinum, the world’s largest platinum producer by sales value and spun off from Anglo American last year, expects its annual profit to rise by as much as 106%. Impala Platinum has forecast half-year profit growth of up to 392%.
Despite the strong turnaround, mining companies are signalling caution rather than launching a wave of new projects.
“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 stick to its policy of paying out 40% of earnings as dividends.
Zimbabwe’s largest platinum producer, Zimplats, which is majority owned by Impala Platinum, is also preparing to reward investors after shareholders supported its 10-year, $1.8 billion expansion plan 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. The company last paid a dividend in the financial year ended June 2023.
Even with prices at historic highs, executives remain wary of approving new output without confidence that platinum group metals prices will remain strong over the long term, especially as costs continue to rise.
“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,” Miller said, adding that he would prefer to see a sustained period of higher prices before backing greenfield developments.
He pointed to the industry’s experience during the last boom, noting that probably only two out of 20 platinum projects launched between 2005 and 2010 are still operating today.
Miller said a long-term platinum price range of $2,300 to $2,500 per ounce would be more appropriate for planning new investments.
Valterra’s executive head of marketing, Hilton Ingram, said long-term average price forecasts have only increased by about 5% to 10%, which he said is not enough to justify new greenfield projects or the reopening of mothballed mines.
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Sibanye Stillwater CEO Richard Stewart said any decision to restart the company’s Stillwater West mine in the United States, which was put on care and maintenance in 2024, would depend on a longer-term view of the palladium market rather than short-term price spikes.
Platinum and palladium, both used in autocatalysts to reduce vehicle emissions, have rallied since the second half of 2025.
The gains have been driven by supply deficits that have helped offset long-term pressure from the global shift toward electric vehicles.
At the same time, rising energy and labour costs, particularly in South Africa, the world’s largest producer of platinum group metals, remain a major concern.
An S&P Global report published in January projected that all-in sustaining costs for primary platinum production would rise 7.7% to $1,006.14 per ounce in 2026.
“Persistent inflation, higher energy and labour costs, and the geological challenges of mining deeper, lower-grade ore bodies will continue to exert upward pressure on the AISC,” the report said.
Although South Africa’s state-owned utility Eskom has stabilised electricity supply after years of severe power cuts, sharply higher electricity prices are still weighing on miners. According to the Minerals Council, power costs for large users have increased by more than 900% since 2008.
“The constraint on growth within the PGM industry is not a question of incentive pricing,” Stewart said. “It’s a lot more complex than simply a trigger price that will incentivise new production.”
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Image Credit: Thermo Fisher Scientific
