Tharisa: Rock Solid Returns

Platinum group metals and chrome are the unsung heroes of the clean energy transition. PGMs are critical in catalytic converters, hydrogen fuel cells, and electrolysers, while chrome is a key ingredient in stainless steel, essential for water infrastructure, renewable energy builds, and low-carbon industrial processes. Tharisa is one of the only producers globally that co-mines both from the same ore body. This co-production model ensures that even during price downturns in one metal, revenue streams remain diversified and resilient. The company benefits from a favourable PGM prill split that includes high-value rhodium, further enhancing margin potential in strong markets. With limited new supply globally and growing demand for both metals, Tharisa’s exposure is timely and strategic.

Tharisa is a multi-decade growth platform. At the Tharisa Mine in South Africa, the company is transitioning from open-pit to underground operations, an investment that extends mine life by more than 50 years and delivers higher-quality ore at more consistent grades. First underground ore is expected in FY26, with full ramp-up by FY29. In parallel, Tharisa is developing the Karo Platinum project in Zimbabwe, one of the few new large-scale PGM projects globally. Karo is targeting 220,000 oz of PGM output annually, with a 10-year open pit and a 50-year underground potential beyond that. Key infrastructure like the processing plant, mill buildings, and substations are already under construction, with first ore expected in FY27. Together, these projects are largely funded and de-risked, and will transform Tharisa into a two-asset PGM producer with long-term scalability and strategic optionality.

Tharisa’s financial discipline sets it apart in the mining sector. Despite ongoing capex for growth, the company maintains a net cash position and continues to generate strong operating cash flows. Its capital allocation is shareholder-friendly: dividends are paid consistently under a 15% minimum payout policy, and buybacks have been actively used to return surplus capital. In FY25 alone, Tharisa returned 17.2% of its net profit to shareholders via dividends and repurchases. The group also benefits from access to both South African and international capital markets, with facilities in place for future flexibility. This gives Tharisa resilience during commodity cycles and enables it to fund growth without shareholder dilution, a rare blend of income, growth, and capital strength.

• Apollo underground development: First ore delivery expected by Q2 FY26, marking the transition from open pit to underground and unlocking improved ore grade and consistency.

• PGM basket price strength: Current market pricing is significantly above FY25 average, offering near-term earnings upside if sustained.

• Karo construction milestones: Completion of key infrastructure like mill buildings and substations by H1 FY26 will signal timely project delivery and increase investor confidence.

• Arxo Metals commercial pilots: Expected launch of chloroplat refining and chrome alloy test phases, proving scalability and economic potential of in-house technology.

• Karo production ramp-up: First ore expected in FY27 with full run-rate of 220,000oz PGM output annually by FY30, adding a second producing asset and diversifying jurisdictional risk.

• Redox One scale-up: Deployment of 1GWh of vanadium-redox battery systems by 2030 will establish Tharisa as a clean energy technology supplier, with potential new revenue streams.

The Karo Platinum project sits within Zimbabwe, a jurisdiction that has historically experienced currency volatility, unpredictable policy changes, and economic uncertainty. Although Tharisa has secured a special mining lease with fiscal stability terms and holds a partnership with the Zimbabwean government, political and macroeconomic risks remain. Potential disruptions include changes to royalty or tax regimes, capital repatriation hurdles, and inflationary pressures. Tharisa is mitigating these challenges through structured funding and strong local relationships but jurisdictional risk is an ongoing concern for investors.

Tharisa is managing two capital-intensive initiatives in parallel: transitioning the Tharisa Mine to underground and constructing the new Karo operation. These projects demand complex logistics, workforce scaling, and supply chain execution. Any delays or budget overruns could undermine project IRRs and strain internal resources. While the company has secured most contractors, financing, and equipment, its ability to deliver both projects on time and within cost will be a key determinant of market confidence.

Tharisa’s earnings are highly sensitive to fluctuations in platinum, palladium, and rhodium prices. While chrome offers some counterbalance, PGM exposure still dominates revenue. Prices can be influenced by vehicle production trends, regulatory shifts, recycling supply, and geopolitical factors. Tharisa benefits from a low-cost structure and diversified output, but extended price weakness could challenge dividend sustainability, future capex plans, and valuation multiples. Investors must remain comfortable with inherent sector cyclicality.