South Africa's National Energy Regulator approved a 15.6% Eskom tariff increase effective April 2026, adding significant cost pressure to PGM miners. All-in sustaining costs for the South African platinum sector now average $1,250/oz, up 12% year-on-year.
At the current platinum price of $1,668.20/oz, the margin above AISC is roughly $418/oz. That is adequate for well-capitalized operations but leaves marginal mines — those with costs above $1,400/oz — at risk of curtailment or closure.
Load-shedding remains a persistent operational challenge. Eskom has implemented controlled power outages on 63 of 90 days in Q2 2026, with Stage 4 cuts on 22 days. Mines have invested in backup generation, but diesel costs add $35-50/oz to operating expenses.
The combination of power costs, wage inflation (8% in the latest labor agreement), and declining ore grades at mature operations is compressing margins. The WPIC estimates that 5-7% of South African PGM capacity sits in the cost-risk zone below current prices.
Platinum supply from South Africa is structurally at risk. The cost floor is rising, and current prices provide only a modest margin. Buyers should factor potential supply disruption into Q4 planning. Any sustained drop below $1,600 would threaten marginal capacity and could tighten the market.