Coronation Increases Stake in Northam Platinum to 15%

Asset manager Coronation has raised its stake in Northam Platinum to 15.05%, signaling a renewed interest in platinum group metals (PGMs). This marks a significant reversal from its earlier stance when it disinvested from the sector, citing value concerns. Coronation’s increased holdings place it alongside the Public Investment Corporation (PIC), which owns 20% of Northam, bringing their combined ownership to approximately 35%.

Coronation’s reinvestment in PGM stocks began in October 2023, when it acquired 5.07% of Northam. The firm expanded its position to 10.01% a month later, before its latest increase to 15.05%. The shift comes despite ongoing challenges in the PGM market, where low prices continue to constrain earnings and limit cost-cutting flexibility due to fixed mining expenses.

Northam has maintained that its growth program remains on track, despite pausing certain project modules to preserve liquidity amid weak PGM prices. The company emphasized its long-term countercyclical growth strategy and operational resilience as key differentiators, allowing it to navigate cyclical downturns.

The broader PGM market faces uncertainty, influenced by global geopolitical and macroeconomic factors. Northam has highlighted concerns over potential Eskom load curtailments, which could disrupt operations, but remains confident that its self-generation capacity will mitigate risks.

A recent Metals Focus report suggested that potential inflationary policies under a future Trump administration, including tariffs on BRICS countries, could pressure PGM prices by slowing global economic growth. However, a rollback of US electrification targets and incentives for internal combustion engine vehicles could provide some support for PGM demand. Meanwhile, long-term hydrogen-linked platinum demand is expected to increase tenfold by 2030, accounting for 10% of overall platinum consumption.

South Africa, home to more than 50% of the world’s platinum reserves, has seen significant job losses in the PGM sector, with 10,000 positions cut over the past year. The industry remains under strain due to the growing adoption of battery electric vehicles (BEVs), which reduce PGM demand. Despite these challenges, Northam remains committed to maintaining stability and growth in the sector.