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BlackRock, the world’s biggest asset manager, continues to steadily increase its stake in the South African platinum group metal (PGM) sector as investors hold out for a rebound in prices.
On Tuesday the group upped its stake in Northam Platinum to just over 5%, having done the same with Sibanye-Stillwater and Impala Platinum earlier this year.
The hunger for PGMs came after tariff fears and a persistent market deficit drove a dramatic rebound in sentiment and a 130% jump in platinum prices last year.
This time, however, inflation fears and a broader market slump mean the mining shares came at a substantial discount.
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The shares of PGM majors such as Sibanye-Stillwater, Impala, Valterra and Northam have been hammered by the Iran war, which sparked a broad precious metal sell-off as investors flocked to bonds in anticipation of higher interest rates.
Platinum prices are down nearly a fifth so far this year, slashing 40% off Sibanye-Stillwater’s value and about 25%-30% from Impala and Northam.
Beyond rate hikes, investors worry that a spike in fuel prices over the past four months will erode mining companies’ profit margins, particularly given the energy-intensive nature of South Africa’s deep, underground PGM mines.
High energy prices and a slump in investment demand saw the platinum market record its first surplus in six quarters during the three months to end-March, according to World Platinum Investment Council data. With inflation unlikely to cool before the first quarter of 2027, miners may continue to face strain for the next six months.
The council now expects overall demand for platinum to fall 9% this year compared with 2025. It believes that the investment windfall that drove PGMs near two-decade highs last year has largely run its course.
Yet, supply of the metal is expected to edge up by 2% as miners, eager to put two years of retrenchments and production cuts behind them, accelerate their operations.
Fortunately, BlackRock seems to view this situation less as a permanent slowdown and more as a necessary correction following a scorching rally.
Even if prices don’t return to the sky-high levels of late 2025, they are still more than 50% higher on average than where they were in 2021-25.
Notably, the council forecasts an annualised 297,000oz overall deficit in 2026. This would be the fourth consecutive year in which supply has fallen short of demand.
As global investor appetite for PGMs continues to grow, rising earnings of PGM miners should provide some comfort to workers in the sector, which continues to be the biggest employer in the mining sector.
In 2024, more than 10,000 employees lost their jobs across the sector as operations slashed output.
Minerals Council South Africa data last month showed higher PGM demand helped add 1,790 jobs to the mining sector in the first three months of 2026, even as total employment fell by 80,000 quarter on quarter.