* Northam Platinum posts 74% increase in H1 profit

* Forecasts 3 billion rand FY2021 capex spend

* To boost output to over 1 million ounces by 2026

JOHANNESBURG, March 19 (Reuters) - South African miner Northam Platinum reported a surge in half-year profit on Friday and said it plans to accelerate capital spending to boost output and take advantage of rising metals prices.

Surging prices of metals including platinum, palladium and rhodium have helped boost platinum group metals (PGM) miners' earnings and weather the impact of the coronavirus crisis.

Northam reported a 74% jump in normalized headline earnings per share for the six months ended Dec. 31 and said it aims to increase output to more than 1 million ounces by 2026, joining rivals Anglo American Platinum and Impala Platinum which plan to boost production.

"If the market pans out the way we expect, you might expect us to do a further growth program beyond the 1 million ounces," said CEO Paul Dunne, adding that the industry could see its best decade yet.

The platinum producer said the dollar basket price of the main minerals it mines surged by nearly 50% in July-December, while a weaker local currency reduced production costs.

It reported normalized headline earnings per share for the six months ended Dec. 31 of 641.5 cents, from 369.6 cents a year earlier.

Production during the half-year rose 15% to 352,741 ounces, while sales volumes slipped 4.4% to 315,320 ounces due to pandemic-related disruptions.

Over the next five years Northam expects to increase output to 500,000 ounces at its Booysendal mine, 350,000 ounces at its Zondereinde mine and 120,000 ounces at its Eland operations with a further ramp-up to 180,000 ounces by 2028, it said.

The Johannesburg-listed miner had to reduce output in the April-June quarter last year due to the pandemic, which meant volumes sent to its refinery in Germany were reduced.

The company said it had reinstated all of the capital projects it had temporarily suspended due to the pandemic and planned to accelerate capex in the second half of the financial year with a forecast of 3 billion rand ($204 million) for the full financial year ending in June.

Capital expenditure during the first half fell to 1.3 billion rand from 1.4 billion a year earlier.

Northam did not declare a dividend, upholding its strategy of acquiring preference shares in its Zambezi Platinum unit as an alternative way to return value to shareholders.

The company, which now holds 87.5% of Zambezi's preference shares, said it would shortly announce plans to return further value to shareholders.

Shares in Northam, which have more than doubled since the start of 2020, were down 2.91%, while the sector was down 3% by 1149 GMT as platinum prices fell on the day. ($1 = 14.7347 rand) (Reporting by Tanisha Heiberg; editing by Sherry Jacob-Phillips, Jason Neely and Susan Fenton)