What's Happening?
GlobalData has forecasted a 6.4% decline in African platinum group metals (PGMs) production for the current year, as detailed in their 'Africa Mining Review – 2025' report. This decrease is attributed to operational constraints and adverse weather conditions affecting productivity, particularly in South Africa, which is responsible for over 80% of global PGM output. Challenges such as power shortages, rising costs, and regulatory uncertainties are impacting the sector. Despite the short-term decline, the report anticipates a compound annual growth rate of 1.4% in PGM production from this year until 2030, reaching 5.12 million ounces. Zimbabwe, holding the world's second-largest PGM reserves, is emerging as a significant player, with investments from major producers like Valterra Platinum and Impala Platinum expected to boost production capacity.
Why It's Important?
The decline in PGM production in Africa, particularly in South Africa, poses significant implications for the global supply chain, given the region's dominance in the market. The operational challenges and infrastructure issues highlight the need for investment in mechanization and economic, social, and governance initiatives to stabilize long-term growth. Zimbabwe's increasing role in PGM production could diversify the supply chain and mitigate risks associated with South Africa's production challenges. This shift may attract foreign investment and enhance the region's economic prospects, impacting global markets and stakeholders reliant on PGM resources.
What's Next?
Future developments in the African PGM sector include the anticipated boost in South African output from new projects like the $1-billion Waterberg project, expected to produce 222,000 ounces annually by 2029. Zimbabwe's government policies and geological advantages are likely to continue attracting investment, potentially increasing its production capacity and diversifying Africa's platinum supply chain. Stakeholders will be closely monitoring these developments, as they could influence global PGM prices and supply dynamics.
