South African platinum producers are seeing some relief from a recent price surge, but earnings remain too low to support new mining projects, as reported by Reuters.

Northam Platinum (NPHJ.J) said its annual profit fell 14.4 percent, weighed down by rising mining costs despite record sales volumes. Headline earnings per share declined to 3.81 rand ($0.2169) for the year ended June 30, from 4.45 rand a year earlier.

"Recent price appreciation is offering some relief to the PGM sector," Chief Executive Paul Dunne said. "However, it is still not yet at levels that will support sustainable mining across the industry and certainly not the much-needed development of new operations."

Platinum group metals (PGMs), mainly used in autocatalysts for fossil fuel vehicles, have struggled since early 2023 amid weak automotive demand and the shift to electric vehicles. South African miners, which supply over 70 percent of global platinum, cut unprofitable output and paused expansion projects.

Prices rose 36 percent in the second quarter of 2025, supported by Chinese imports and tighter domestic supply. Dunne said tight PGM supplies are likely to persist, with rising demand for minor PGMs such as ruthenium in industrial applications like data storage.

Structural challenges remain, with under-capitalised mines and declining mine life shrinking output. The number of operational PGM shafts in South Africa has dropped from 81 in 2008 to 53 today, Northam said.

Impala Platinum CEO Nico Muller cautioned against expanding production too quickly, noting the sector remains vulnerable despite slower-than-expected electric vehicle adoption.