That note was posted on May 23 and PPLT is down 2.7% since then, implying some of PLTM’s 19 holdings may still be losing money on platinum production. Sprott noted that cash flow return on operating assets, the true metric of return on invested capital for platinum metals miners, was stellar during previous boom times for the metal, such as 1999-2002 and 2006-2008.

“In 2012, the CFROI in the platinum sector of South Africa’s economy was a miserable -0.6%, the lowest return on capital since 1992,” according to Sprott.

South Africa is the world’s largest platinum producer and the second-largest palladium producer behind Russia. Those two countries combine for 39.5% of PLTM’s weight with South Africa alone garnering a weight of 30.3%. That means the country’s platinum miners must find a way to increase profitability and do so quickly so PLTM can sustain its recent bounce.

First Trust ISE Global Platinum Index Fund

ETF Trends editorial team contributed to this piece.