SMM Daily Comments (May 19): LME Metals Rose across the Board, All Ferrous Metals Dropped with Coking Coal Plunging

[SMM Flash] Northam Platinum has emerged as one of the most attractive growth stories in South Africa’s platinum group metals (PGM) sector after overcoming decades of geological and mining challenges at its Zondereinde operation. The company now benefits from strong profitability and an industry-wide decline in PGM mine supply, while its Vision 2031 strategy targets annual PGM production of around 1.5 million ounces. The company has also opened the door to potential approaches at both corporate and asset level following an informal approach from a third party. CEO Paul Dunne said the process is intended to ensure Northam’s long-term strategic value and industry position are properly recognised for shareholders. The move has fuelled speculation over a possible bidder, with Valterra Platinum attracting particular attention because its Amandelbult and Der Brochen operations are adjacent to Northam’s Zondereinde and Booysendal assets. Sibanye-Stillwater and Impala Platinum have ruled themselves out. Other potential candidates mentioned include Ivanhoe Mines’ Ivanplats group and African Rainbow Minerals (ARM), both of which have strategic interests in expanding their exposure to platinum. Any transaction would need to justify a significant strategic premium given Northam’s established production base and growth pipeline. The development highlights the increasing strategic value of established South African PGM assets as supply constraints support the sector’s longer-term outlook.

[SMM Flash] Iridium’s extreme physical and chemical properties make it one of the most difficult platinum-group metals (PGMs) to assay accurately. With a melting point of about 2,446°C and strong resistance to corrosion and conventional acids, iridium cannot be fully processed using the standard equipment and methods commonly used for gold, silver and other precious metals. Conventional sampling can produce significant errors because iridium remains solid during normal furnace processing and its high density causes iridium-rich particles to settle at the bottom of crucibles. Standard lead fire assay can also lose iridium through slag, crucible and cupel interactions. Specialised techniques such as nickel sulfide collection, alkaline fusion and molten-salt chlorination are therefore required for reliable analysis. The challenge is becoming increasingly important as iridium supply remains highly constrained. The metal occurs at extremely low concentrations in the Earth’s crust, is mainly recovered as a byproduct of other mining and has annual primary supply measured in only a few tonnes. With demand rising, particularly from PEM electrolyzers, accurate assaying is critical to maximise secondary recovery and ensure fair valuation of iridium-bearing materials.

[SMM Flash] The platinum group metals (PGM) industry is increasingly looking to artificial intelligence (AI) and related technologies for new demand, as green hydrogen’s contribution to platinum consumption remains limited. Metals Focus estimates that 7,000 MW of electrolyser capacity will be deployed in 2026, consuming only around 45,000 oz of platinum. AI-related applications are creating opportunities for platinum, ruthenium and iridium. The World Platinum Investment Council estimates that data storage, optical networks and semiconductor manufacturing generated around 500,000 oz of incremental PGM demand over the past two years. Iridium is expected to remain in deficit in 2026, while ruthenium is forecast to remain in substantial deficit at 14% of demand. Platinum demand from the glass sector could also rise by 83% in 2026, supported by new fibreglass capacity linked to AI applications. The opportunity is significant because minor PGM markets are small, concentrated and supply-constrained, meaning relatively modest demand increases could materially affect prices. However, miners face a delicate balance between supporting emerging demand and investing in excessive new capacity.