SMM2 19: Anglo American Platinum Co., Ltd. (Anglo American Platinum Ltd.) Announcing its biggest dividend since 2008, the company reported a nearly doubling in full-year earnings, thanks mainly to a weaker rand and soaring prices for its sister palladium metal.
Competitors such as Impala Platinum Holdings Limited and Longming (Lonmin Plc) have also benefited from rising prices of palladium and rhodium, which work with platinum to mine palladium and rhodium.
After a six-year hiatus, the company resumed paying dividends in February last year. During this period, the company sold some of its older, lower-margin businesses and gradually downsized them.
Palladium prices have risen 47% in a row since the end of August, a record.
The metal, which is mainly used in gasoline engine catalytic converters in the automotive industry, is expected to be in short supply for the eighth consecutive year by 2019.
Over the past 12 months, the South African currency has also depreciated by 18% against the dollar, reducing the cost of local mines.
Anglo-American Platinum Industry: Palladium will continue to be in short supply until carmakers are transformed
The Anglo-American platinum industry says the shortage of palladium, which has pushed prices to record highs, will not go away unless carmakers replace palladium to curb emissions from gasoline vehicles.
Amplats Chief Executive Chris Griffith said that no new mines will increase supply in the short term, demand is expected to exceed supply, and palladium prices will continue to rise.
The surge in palladium prices will push up rhodium prices. However, the company does not expect platinum prices to rebound from their lowest level in nearly a decade and expects a small surplus in 2019.
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