Thanks to its substantial chrome operations — extracted from the very same ore body that yields its platinum group metals (PGMs) at Tharisa Mine near Rustenburg — Tharisa was able to weather the last PGM downturn far better than many peers.
While single-commodity PGM miners saw margins compress and cash flows dry up as basket prices weakened, Tharisa’s chrome output continued to generate meaningful cash, effectively underwriting the business through the softer part of the cycle.
The split in the 2025 financial year illustrates this clearly. Even with the average PGM basket price recovering strongly — up 18.6% to $1,615/oz — chrome still accounted for the bulk of the earnings, contributing roughly 64% of gross profit for the year.
That resilience, however, didn’t come without debate. As chrome generated the bulk of the cash during the downturn, management continued directing capital towards the development of the Karo platinum project in Zimbabwe. With PGM prices subdued for much of 2023 to early 2025, the optics were uncomfortable: why channel hundreds of millions of dollars into a new platinum build when the existing business was already producing cash that could just as easily have been returned to shareholders through higher dividends?
The counterargument was that Tharisa is effectively a single-asset business. Relying on one ore body in one jurisdiction leaves the group exposed to operational, regulatory and geological shocks. Karo, on Zimbabwe’s Great Dyke, provides diversification through a large-scale, long-life open-pit development with established infrastructure and room to scale.
Tharisa owns 78% of the Karo holding company, translating to an effective 66% stake at the project level after the Zimbabwean government’s 15% free carry. About $193m has already been invested, with total capital expenditure estimated at $550m and first production targeted for the first half of 2027 — a sizeable commitment, but one that materially reduces the group’s single-asset risk.
The mine will start as an open-pit operation before transitioning underground after about a decade. The remaining funding still needs to be secured, however, and arranging project finance in a jurisdiction like Zimbabwe is unlikely to be straightforward.
Market movements over the past year have gone some way towards vindicating Tharisa’s decision to expand its PGM footprint. With basket prices roughly doubling off their lows, the timing looks increasingly sensible — particularly given that Karo is one of just two major greenfield PGM projects globally, making it a scarce and strategically valuable new source of supply.
On valuation, though, the market already seems to be pricing in a healthy dose of caution
That said, much of the PGM price rally appears to have been investment-led rather than underpinned by stronger industrial demand, with the broader dollar-debasement trade also buoying traditional hedges such as gold and silver alongside the PGMs. That dynamic can amplify price swings, raising the risk of sharp volatility ahead — even though most analysts still expect the PGM market to remain firm over the next three years.
It could also test investors’ resolve, particularly as it’s not just Karo that requires funding. Back home, the group plans to spend a further $547m over the next 10 years or so to complete the underground transition at Tharisa Mine and extend its life. Combine the two and the cumulative capital commitments become significant — even allowing for the South African spend being phased over a decade and part of Karo’s remaining capex potentially supported by a gold streaming deal. For a business that generated under $100m in net operating cash last year, that’s still a meaningful funding burden.
On valuation, though, the market already seems to be pricing in a healthy dose of caution. The shares trade on a historical earnings multiple of under seven times 2025 earnings. That number is slightly flattered by a $67m royalty credit flowing through cost of sales, but it still looks undemanding when you consider that today’s PGM basket sits closer to $3,000/oz than the $1,615/oz realised in 2025. On that basis alone, earnings could look materially stronger.
Add in the growth profile — which is fairly rare among established PGM producers — and the investment case starts to look more compelling. Karo alone has the potential to more than double group PGM output over time, while parallel investments in downstream processing should allow Tharisa to further refine its concentrate, capture an extra 15% margin and move closer to full metal price realisation rather than selling at a discount.
For investors, it boils down to a simple question: does the current PGM strength have legs? If the answer is yes, Tharisa offers meaningful upside given its low valuation and production growth profile. If no, the same capital commitments could weigh on cash flow and the balance sheet.
In that sense, Tharisa is increasingly a leveraged call on the PGM cycle — potentially rewarding if prices hold, but far less forgiving if they don’t.
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