South African miner Impala Platinum (JSE: IMP; US-OTC: IMPUY) may close its Canadian palladium mine earlier than planned after prices for the metal used in gasoline vehicles have plummeted more than 70% over the past three years.
Implats, the common name for the miner, has been “continuously evaluating the future” of the palladium-rich Lac des Iles mine in Ontario, CEO Nico Muller said Thursday in comments on last year’s second-half performance. The operation contributed about 7% of the company’s production in the period.
“I would not be surprised if, in the course of the next few months, we come to a position that an accelerated and responsible wind down of that operation seems to be economically the most effective way to deal with (Impala) Canada,” Muller said.
Shares in Implats fell 2.5% on Thursday in Johannesburg to close at 91.79 rand ($4.97) apiece for a market capitalization of 83 billion rand.
Price plunge
Palladium has suffered the steepest price drop among platinum group metals, plunging from a peak of about $3,440 an oz. in March 2022 to current levels around $921. The metal is used in pollution control catalytic converters, but electric vehicles have depressed that industrial need.
The sharp fall has weighed on Implats’ profitability, cutting its first-half fiscal 2025 earnings to 1.9 billion rand (US$103 million).
Implats acquired the Lac des Iles mine in 2019, which fuelled the company’s profits in the early part of the decade.
Like its peers such as Anglo American Platinum (LSE: AAL) and Sibanye-Stillwater (JSE: SSW; NYSE: SBSW), the company has been forced to cut costs and scale back production in response to persistently weak metal prices.
No wonder my grandson , who started there in November, was terminated last week.