South African mining company Valterra Platinum has reported a sharp rise in half-year profit, supported by stronger metal prices and higher sales volumes, while identifying artificial intelligence as a potential new source of demand for platinum group metals.
Valterra, described as the world’s largest platinum producer by value, recorded headline earnings per share of 82.02 rand for the six months ended 30 June, compared with 4.73 rand during the same period last year. The increase followed an 85 per cent rise in metal prices and an 18 per cent improvement in sales volumes.
The longer-term outlook for platinum group metals has been challenged by the expansion of electric vehicles, which do not use the emissions-control systems traditionally supported by PGMs in petrol and diesel vehicles. This shift has encouraged Valterra and other producers to identify additional industrial applications for the metals.
Chief Executive Officer Craig Miller told Reuters that the growth of artificial intelligence and the data centres required to support it could create significant new demand.
“There is about 2 million ounces of real demand which sits there today, that we’re actively working on with a high degree of confidence,” Miller said.
“AI was probably not necessarily on our radar 24 months ago. But what we are seeing is that PGM demand in AI-related activities is today conservatively, we think, somewhere between 200,000 and 400,000 ounces of demand,” he added.
Miller said AI-related demand could increase fivefold by 2030. Valterra estimates that future annual PGM demand across industrial uses, jewellery, hydrogen technologies and AI applications could reach 10 million ounces.
According to the World Platinum Investment Council, PGMs possess electrical, thermal and catalytic properties that are relevant to AI infrastructure and advanced electronics.
Miller also said the metals could replace about 10 per cent of the gold currently used in electroplating and related electronic applications, potentially generating another one million ounces of annual demand.
Valterra announced an interim dividend of 57 rand per share, up from 2 rand last year, returning 15.1 billion rand to shareholders.