Anglo American completed the spin-off of its platinum unit last May, establishing the newly independent Valterra Platinum just as market conditions began favouring platinum group metals (PGMs).
The diversified miner first indicated its plans to abandon Anglo American Platinum (Amplats) in May 2024, declaring that its portfolio and structure would be simpler without its platinum unit.
Anglo had endured a prolonged period of depressed PGM prices that weighed on its financial performance.
Realised basket price was $1,442, down 24% in the first half of 2024 compared to the first half of 2023, but only 1% lower than the second half of 2023.
Platinum averaged $945 per ounce, a modest 6% lower year-on-year, and 2% higher than in the second half of 2023.
The palladium price also fell 35% year-on-year, averaging $976 per ounce in the first half of 2024.
There was also a 17% decline compared to the second half of 2023, with the price experiencing only brief rallies within a prevailing downward trend.
Rhodium further saw a significant year-on-year decrease of 49%, at $4,602 per ounce.
Rebound
Since the announcement of the demerger, platinum futures have surged approximately 60% year-to-date through mid-July, breaking free from a three-year trading range between $900 and $1,100 per ounce, according to the International Banker.
It also claimed that platinum prices further rose due to high global demand, not least via investors and consumers who have been buying up safe-haven precious metal assets—platinum included—against a backdrop of pronounced market uncertainty stemming from the United States’ widespread imposition of tariffs.
China, the world's single largest platinum consumer, has also imported substantial quantities of platinum thus far this year, while reports have noted that investment demand for platinum increased by a massive 300% year-over-year during the first quarter of this year.
The World Platinum Investment Council (WPIC) recently projected that China's demand for platinum jewellery would post modest gains after a long-term declining trend that goes back more than a decade, while its platinum-jewellery processing volumes expanded by a mighty 26% in the first quarter of 2025.
Similarly, shifting demand trends have also emerged for platinum bars and coins, lending further support for the precious metal this year.
The Old Mutual Investment Group said South Africa's treasury is poised to receive a timely fiscal boost from surging PGM prices ahead of its critical October budget.
"Given the role that PGMs play in revenue collection ... this could be a bit of a gift horse windfall to the government of national unity," said Old Mutual Investment portfolio manager Meryl Pick.
The year 2025 has so far been a year of considerable tightness for the platinum spot market, according to the International Banker.
It noted that such tightness was nowhere more clearly shown than in the days leading up to April 2’s notorious Liberation Day, on which US President Donald Trump announced widespread tariffs on imports from countries all across the world.
Hundreds of thousands of ounces of platinum were sent to US warehouses during this period to capitalise on a sizeable arbitrage opportunity before the tariffs took effect.
“The market is completely wrong-footed because everybody expected there to be a drag on demand resulting from these tariffs,” Daniel Ghali, a commodity strategist at TD Securities, told Bloomberg. “There’s absolutely no evidence of that as of yet. Instead, what we see is stockpiling in China competing with stockpiling in the US, both driven by different incentives, but both contributing to a depletion in global inventories.”
No further gains?
However, while the first half of the year was undoubtedly a spectacular one for platinum bulls, not everyone remains convinced that the precious metal can repeat the trick during the second half, with analysts already pointing to a combination of emerging factors that could well put a lid on further gains. The evidence certainly seems to imply that the extreme tightness in the global supply of the first six months may well be easing.
While some analysts question the sustainability of the rally amid global economic uncertainty, Old Mutual analysts identify structural supports: slower-than-expected electric vehicle adoption in Western markets maintains demand for hybrid vehicles using PGMs in catalytic converters, while years of mining underinvestment constrain supply.
According to the International Precious Metals Institute (IPMI), platinum lease rates have declined from their June peak of 22.7% to 11.6%.
“The easing of lease rates is particularly significant as it reflects reduced competition for immediate physical supply—a classic indicator that the most acute phase of a supply shortage may be passing,” the IPMI, a leading trade association for the precious-metals industry, stated in an analysis published on July 4.
The report also noted that South African mine supply would show signs of recovery in the second half of 2025, while global platinum mine production is projected to decline by only 6% for the full year.
WPIC projected that a significant global supply deficit would persist for at least the next five years.
This justifies Anglo’s move to abandon its PGM unit.
“The platinum investment case remains compelling, with the overriding feature being that the substantial market deficits of 2023 and 2024 are expected to persist throughout our forecast period to 2029f,” the Council said in a forecast released on June 19.
"Inclusive of 2025 forecasts, which are provided by Metals Focus, we expect annual platinum deficits to average 727 koz from 2025f to 2029f, or 9% of average demand."
Masterstroke
By shedding this historically volatile segment, Anglo is now able to concentrate its resources on core commodities like copper, iron ore, and crop nutrients, which are central to global energy transition and food security needs.
This dovetails with the group chief executive Duncan Wanblad's vision of building a more resilient and future-facing portfolio.
The demerger greatly lowered Anglo's exposure to the unpredictable PGM market, which has long been plagued by cyclical price swings and operational risks.
The spin-off also eliminates the company's vulnerability to structural demand shifts, such as the threat posed by electric vehicles to platinum and palladium use in catalytic converters.
The split also strengthened Anglo's balance sheet and improved its investment appeal.
It sidestepped ongoing issues like South Africa's energy crisis, rising production costs, and competition from lab-grown diamonds in jewellery markets.
Mathew Nyaungwa, Editor-In-Chief, Rough & Polished
