• In Q1 2025, Zimbabwe's platinum output fell by 13% to 115,000 ounces, attributed to lower ore grades
• South Africa experienced a 10% decline in Q1 2025 due to heavy rainfall and smelter maintenance
• Russia's platinum production remained stable at 180,000 ounces in Q1 2025, but sanctions may lead to future declines in palladium-related outputs
• The World Platinum Investment Council projects a 966 koz deficit for 2025

Harare- Zimbabwe’s platinum production experienced a significant decline in the first quarter of 2025 with the World Platinum Investment Council (WPIC) reporting a 13% drop to 115,000 ounces, attributed to lower ore grades and furnace-related issues.

Zimbabwe is the world’s third-largest platinum producer, and achieved a record output of 507,000 ounces in 2023.

It boasts also the second-highest platinum reserves globally, and relies heavily on its mining sector, which accounts for 70% of its foreign currency earnings, with the gold and platinum industry playing a central role.

In 2021, Zimplats, a leading platinum producer and Zimbabwe’s biggest corporate, generated a historic $1.4 billion in revenue, contributing $258 million in taxes to the Zimbabwe Revenue Authority (ZIMRA), equivalent to 7% of ZIMRA’s total collections for that year.

However, global platinum prices have plummeted due to multiple factors, including the rising prominence of lithium, Russia’s invasion of Ukraine, the Israel-Hamas conflict, and tariffs initiated by U.S. President Donald Trump.

These pressures led to a sharp decline in platinum prices, compelling global producers, including those in Zimbabwe, to reduce output. In response, Zimbabwe’s major platinum companieslike Zimplats, Mimosa, and Unki implemented cost-cutting measures, such as layoffs, reduced production targets, and delayed projects.

The Karo Mining project was postponed to 2026 due to unfavourable platinum prices.

In 2023, Zimbabwe’s platinum production had risen by 6% to 507,000 ounces, driven by operational stability and investments, but declining global platinum group metal (PGM) pricesof platinum fell 35% to $960 per ounce and palladium dropped from $3,000 to $900 per ounce since April 2023 have severely impacted profitability.

Zimplats, the largest platinum producer in Zimbabwe, operates on the Hartley Geological Complex, with reserves of 217.4 million tonnes, far surpassing Mimosa’s 33.2 million and Unki’s 48.4 million tonnes.

Despite a 9% increase in 6E (platinum, palladium, rhodium, ruthenium, iridium, and gold) production to 320,196 ounces in its half-year results to December 2023, Zimplats reported a 32% revenue decline and an $8.8 million post-tax loss. The company’s challenges continued into Q1 2025, with a 96% profit drop in FY2024, driven by low prices, higher taxes, and furnace disruptions.

Meanwhile, Unki, owned by Anglo American Platinum, saw a 15% production decline in Q1 2025 due to operational issues, despite earlier stability from a concentrator debottlenecking project in 2023.

Mimosa, co-owned by Impala Platinum and Aquarius Platinum, faced a 15% cost increase in 2023 due to power outages and shelved a $100 million expansion, laying off 33 managers in early 2025 to remain viable. Although Zimbabwe’s Q4 2023 output rose 8% to 133,000 ounces, driven by Unki’s improved head grades and mechanised mining, Q1 2025 saw a lapse.

Globally, South Africa, the world’s leading platinum producer, saw a 4% output increase to 4,132,000 ounces in 2024 but facesd 10% decline in Q12025 and a projected shortfall  in FY 2025 due to reduced inventory releases and restructuring.

Russia, the second-largest producer, maintained steady output at 677,000 ounces in 2024, with a 1% increase to 180,000 ounces in Q1 2025, though palladium-related declines are expected in 2025 due to sanctions while North America experienced a 30% production drop to 50,000 ounces in Q1 2025, driven by operational restructuring amid weak PGM prices.

The WPIC forecasts a global platinum supply of 6,999 koz in 2025, down 4%, with mine output declining 6% to 3,869 koz in South Africa, 4% to 491 koz in Zimbabwe, and 26% to 189 koz in North America.

The market is projected to face a third consecutive year of deficits, with a 966 koz shortfall in 2025, following a 992 koz deficit in 2024, driven by a 10% supply decline and a 10% demand increase in Q1 2025.

Q125 Performance

In Q1 2025, total platinum supply fell 10% year-on-year to 1,458 koz, the lowest since Q2 2020, with mine production dropping 13% to 1,108 koz, particularly due to South Africa’s 10% output decline caused by heavy rainfall, flooding, and smelter maintenance.

Recycling increased slightly by 2% to 372 koz, supported by autocatalyst scrap recovery in North America and China, though jewellery scrap fell 11%.

Demand surged 10% to 2,274 koz, driven by a 361 koz inflow into NYMEX stocks amid U.S. tariff fears, which spiked lease rates to 13% but automotive demand declined 4% to 753 koz, reflecting flat light-duty vehicle production and a 12% drop in heavy-duty vehicle output, while industrial demand contracted 22% due to reduced glass capacity additions in China.

However, jewellery demand rose 9% to 533 koz, with significant growth in China (26%), Europe (17%), and North America (11%). For 2025, total demand is projected at 7,965 koz, down 4%, with automotive demand falling 2% and jewellery demand rising 5%, supported by growth in Europe and North America.

U.S. tariff policies, evolving since November 2024, have added volatility to the platinum market. Early fears of tariffs on platinum imports drove Q1 stock inflows, but exemptions for sponge, grain, and ingot as critical minerals in April 2025 eased lease rates to 7%.

However, tariffs on manufactured products like catalysts and minted bars have indirectly reduced demand, with automotive forecasts cut by 50 koz and Indian jewellery exports to the U.S. down 45 koz.

Despite these challenges, platinum’s strategic importance and domestic supply shortfall in the U.S. support exemptions, while China’s shift to platinum jewellery, bolstered by high gold prices and innovative sales channels like TikTok, enhances demand resilience.

The projected 966 koz deficit for 2025, equivalent to 12% of demand, shows market tightness, driven by supply constraints in South Africa and resilient demand from jewellery and investment sectors.

Despite Q1’s failure to sustain price gains due to tariff concerns, platinum’s price inelasticity and dwindling above-ground stocks, equivalent to three months of demand, reinforce its compelling investment case.

Equity Axis News