African Rainbow Minerals (ARM) said on Friday it was deferring plans to expand output at its Bokoni mine due to low platinum group metal (PGM) prices after reporting a 43% drop in its half-year profit.

The diversified South African miner’s headline earnings declined to 2.96 billion rand ($158.5 million) in the six months to December 2023, from 5.17 billion rand previously, as lower thermal coal and PGM prices hit income.

ARM cut its interim dividend to 6 rand per share, from 14 rand per share previously.

The miner acquired the Bokoni mine in South Africa from Anglo American Platinum and Atlatsa Resources Corporation in 2022 as part of its plans to expand PGM output.

Bokoni mine, which had been put under care and maintenance by its previous owners in 2017, resumed production in November 2023, with plans to further expand output.

However, the sharp fall in PGM prices over the past year, mainly due to weaker demand in China and an uncertain global economic outlook, has forced South African miners, who account for 70% of world output, to suspend projects and cut costs.

ARM said a bankable feasibility study for the phased development of Bokoni, a key step towards securing funding, had been deferred “due to depressed commodity prices and uncertain immediate outlook”.

The company said the prices of palladium and rhodium fell 42% and 70%, respectively, during the period under review, resulting in a 40% decline in the average realized rand price for its set of PGMs.

ARM said its immediate priority is to conserve cash while ramping up production on a phased basis from the installed capacity of 60,000 metric tons of ore per month using existing infrastructure.