The worlds second biggest platinum producer, Impala Platinum (Implats), has released its results for the six months ended 31 December 2012. The results reflect that its Rustenburg operation has performed poorly in different aspects over this period.The company announced that Implats‘ Rustenburg operation continued to be affected by the complex changing labour environment experienced since the strike last year, as well as subsequent events in the region. Further, the platinum miner points out that company and Department of Mineral Resources stoppages, a lack of ore reserve flexibility and mining quality also had an impact on the performance of the operation, resulting in a 25% production decline to 368 000 oz of platinum exacerbated by a 22 000 oz pipeline lockup. The lower output negatively impacted unit costs, which rose by 52% to R16 674/ozof platinum. Meanwhile, total revenue for Implats was marginally down at R15.2 billion, while headline earnings fell to R776 million due to a decrease in mine-to-market throughput, above-inflation cost increases and the impairment of long-term receivables. “The period under review continued to be affected by the complex changing environment at both company and industry level,” explained Implats CEO, Terence Goodlace. Zimplats, Implats‘ Zimbabwe-based subsidiary, announced that tonnes milled remained flat at 2.2 Mt, although a fire in the smelter during November last year and a subsequent run out in December impacted platinum in matte production, which declined 20% to 73 400 oz. The company also concluded a nonbinding term sheet with the government of Zimbabwe, which stipulated the key terms of the indigenisation plan.
Platinum production in concentrate at Implats‘ Marula operation rose by 1% to 36 000 oz. The company says its strategy review has been completed and has proved the operations ability to increase production to 90 000 oz of platinum over the medium term.Implats admitted in its statement that 2012 had been a watershed year in the platinum industry as significant labour unrest at Impala Rustenburg, as well as at other platinum producers, reduced South Africa‘s platinum supply in excess of 600 000 oz. Nonetheless, the company believes that demand for its metals remained firm, with the automotive industry continuing to perform well at the back of global passenger vehicles sales increasing by more than 5% to exceed 80 million units for the first time. Further, jewellery markets also experienced growth, primarily driven out of China and India where platinum is becoming more accepted as a jewellery metal. The company said that the operating environment in South Africa continued to be challenging as a result of labour relations uncertainty, while it expected cost pressures to remain high as a result of proposed power hikes and potential wage demands. “We are confident that we will be able to position Implats appropriately for the future following the focus on operational efficiencies, as well as the progress made on replacement shafts in South Africa and the growth project in Zimbabwe,” concluded Goodlace.