(Bloomberg) -- Africa’s biggest money manager expects platinum miners to continue making bumper payouts as tighter vehicle-emissions rules boost metals demand and earnings.

The Public Investment Corp., which manages mainly South African government worker pensions, said it has invested more than 110 billion rand ($7.4 billion) in miners including Sibanye Stillwater Ltd., Anglo American Platinum Ltd. and Impala Platinum Holdings Ltd. That’s brought “great” returns over the past three years, said Mdu Bhulose, the PIC’s portfolio manager for mining and resources.

“The cycle should continue for some time,” Bhulose said in an interview last week. “The supply and demand dynamics are quite solid and they are talking to a tightening market which should be supportive of prices.”

After being in the doldrums for a decade, South Africa’s platinum miners are increasing payouts as they reap windfall profits from near-record rhodium and palladium prices. Bhulose said that barring any shocks to demand from automakers -- the biggest consumers of platinum-group metals through the anti-pollution devices they install in gasoline and diesel cars -- the bonanza has further to run.

The PGMs cycle “could remain stronger for longer” and returns close to historical peaks maybe signaling a maturing cycle, according to RMB Morgan Stanley analysts, including Christopher Nicholson, said.

“We still see reason to retain exposure to the sector,” he said. “However, a prudent move would be for investors to reduce some overweight positioning.”

The dearth of investment in new mining projects over the past decade means supply deficits will persist, Bhulose said. Still, the longer-term threat to demand posed by electric vehicles, means miners must remain wary of expansion, he said.

“As much as we can see tightening in the supply-demand dynamics, you also don’t want people to needlessly spend money or take their eye off the ball,” Bhulose said.

(Updates with analyst comment from fifth paragraph)

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