By Dineo Phoshoko

Expanding Africa’s platinum assets

Implats is a of platinum group metals (PGMs) producer with six mining operations in South Africa, Zimbabwe and Canada. The operations are located on the Bushveld Complex in South Africa, the Great Dyke in Zimbabwe, and the Canadian Shield. Johan Theron, group executive: Corporate Affairs at Implats, answers Inside Mining’s questions.

All photos by Implats

What makes mining in Africa different compared to the rest of the world?

JT  Implats has operations in South Africa, Zimbabwe and Canada – with each country offering challenges and opportunities. Looking at the African context specifically, the continent produces more than 60 metal and mineral products, and has huge potential in terms of mineral reserves exploration and production. The continent presents excellent investment opportunities for local and international investors. This potential needs to be unlocked. For example, the exploration and beneficiation levels in African countries are way below those of other resource-rich territories such as Canada, Australia and South America. We work closely with our stakeholders to unlock the potential of the mining industry to help strengthen the economies in which we operate, improve competitiveness and achieve greater economic diversification.

What is the most challenging aspect of operating in Africa?

Operating in Africa has its unique challenges. In South Africa, factors such as rand volatility and the operational and financial crisis at Eskom pose challenges to all domestic producers. In Zimbabwe, the economic crisis, effects of the drought, rolling power cuts, and shortages of food and other essential supplies pose challenges to businesses and citizens alike. Platinum miners face challenging stakeholder expectations. Governments seeks enhanced transformation, job creation and taxes from a shrinking mining sector. Communities, frustrated with rising unemployment and poor service delivery, turn increasingly to private sector employers to meet their expectations.

How does Implats deal with these challenges?

At Implats, stakeholder engagement remains key to the successful implementation of the Implats strategy in the countries in which we operate. The goal of contributing to socio-economic transformation remains a strategic imperative. The Group actively seeks to play a role in meeting government social and economic development goals in South Africa and Zimbabwe.

In line with one of the spokes of our Group strategy – to strengthen our social licence to operate – we continue to deliver on commitments in our social and labour plans (South Africa) and through projects (South Africa and Zimbabwe) that meaningfully mitigate social challenges in our host communities.

In FY 2019, our socio-economic development spend was R86.2 million in South Africa and $3.82 million in Zimbabwe. Other key highlights achieved during FY 2019 include: 3 420 houses built to date for our industry-leading employee housing scheme; an 82% increase to R70 million in local-to-site (tier 1) procurement spend at our Marula mine; a 23% increase to R1.6 billion in local-to-site (tier 1) procurement spend at our Impala Rustenburg operation; an 11% increase to $124.5 million in spend with local indigenous-owned businesses in Zimbabwe; and full compliance with Mining Charter requirements.

Expanding Africa’s platinum assets
Employee health and safety are crucial in the mining industry.

In addition, Implats is committed to playing its role in the attainment of the UN Sustainable Development Goals, by supporting governments and working with other stakeholders to build thriving communities. This work builds on our ongoing commitment to the UN Global Compact and its 10 principles, to which we have been a signatory since 2008.

What impact do you think the African Continental Free Trade Agreement (AfCFTA) would have on mine companies operating in Africa?

Economic and political stability are critical elements for the success of the AfCFTA, not just nationally but also regionally. The political will driving the initiative provides a unique platform for resolving disputes and long-standing issues between African nations, as they move towards deeper regional integration and embrace the concept of shared value. Certain mining jurisdictions – Zimbabwe, for example – could attract more capital for their mining sectors on the back of dismantled borders following the establishment of the AfCFTA. The agreement, if effective, could diversify many African economies away from their over-reliance on resources, which would be an advantageous outcome.

In terms of mine operations, what would you say Implats is doing well and what could you improve on?

Implats’ latest results for the half-year ended 31 December 2019 show that the Group delivered solid production and safety results. Sustained operating performances from mining operations, together with robust rand PGM pricing during the period resulted in significantly improved free cash inflow and strong headline earnings. This enabled Implats to fund the acquisition of Impala Canada and reinstate dividends. The Group’s strategic repositioning as a high-value, profitable and competitive PGM producer was meaningfully advanced through initiatives to improve organisational effectiveness at key operations.

Safety remains the Group’s foremost priority. Despite improvements in the lost-time and all injury frequency rates, we remain steadfast in our resolve to eliminate all fatal work-related accidents from our portfolio. Safety challenges have been met with increased leadership focus and greater collaboration with all stakeholders to prioritise safe production across all operations.

To improve our future performance, the Group continues to make headway on delivering into its stated value-driven strategy, which includes: protecting and strengthening our licence to operate; optimising the balance sheet and capital allocation; enhancing the competitiveness of the portfolio; and repositioning Implats to the lower half of the cost curve.

What would you say is the biggest lesson Implats has learnt operating in Africa?

Resilience, innovation and engagement are key to operating in an African context.

How has the mining ministry dealt with Covid-19 and what impact did this have on Implats operations?

Employee health and safety are key imperatives in the mining industry generally. As such, the sector has shown itself better placed than many others to tackle the challenges presented by the Covid-19 pandemic.

The mining industries in South Africa and Zimbabwe have been fully supportive of government measures to prevent the spread of Covid-19 and the efforts to manage this unprecedented crisis. The sector has planned and collaborated closely with its regulators, national health departments, industry bodies and organised labour to: contain the spread of the disease; support the rapid detection and isolation of individuals who may have been affected; ensure that employees and their families have the understanding and support they need; and augment national and community resources where possible.

In terms of the impact on operations: the Covid-19 pandemic is still gathering momentum in South Africa and Zimbabwe, and the full impact is yet to be felt. The Group’s focus for the remaining months of FY 2020 will be multipronged and include securing operational stability in a period where unplanned interruptions are likely to be a regular feature. Protecting the health and well-being of our employees and maintaining close and collaborative relationships with our stakeholders are key.

What measures did Implats put in place to curb the workplace spread of Covid-19?

The Group’s internal planning to secure operational resilience during the novel coronavirus pandemic has been ongoing since January 2020. Implats’ approach is based on the view that the virus will be a feature for some time and operating in a ‘business as usual’ environment will not be possible in the near term. Implats’ primary focus has therefore been on protecting the lives and livelihoods of its stakeholders by taking steps to secure and sustain the financial viability of the Group and support the national economies of the countries in which it operates.

Expanding Africa’s platinum assets
Implats is among the leading platinum group metals producers globally.

Implats has implemented and enforced several measures to provide protection to its employees, rolling out a number of programmes that have been in development internally since the threat of Covid-19 emerged in January 2020. The lockdown period was used to significantly strengthen preparations to ready the business and safeguard employees. Stock levels of medical protective equipment and PPE were increased, the regular large-scale disinfection of workplaces is being performed, and screening and testing procedures for all employees currently reporting to work to perform essential services have been implemented.

A meaningful increase in medical care preparedness has also been undertaken through increasing the capacity of internal medical facilities and through the coordinated collaboration with industry peers, public-private partnerships, and both local and regional medical institutions.

Management teams across all Group operations have introduced vital risk-based operating procedures to further protect employees. These measures are specifically aimed at reducing the risk of viral infections in high-risk work areas and to vulnerable employee categories. These steps include improved hygiene, restrictions on the amount of work performed, social distancing while performing work and while travelling to/from work, the provision of additional PPE, and the implementation of screening and testing procedures.

All employees are screened using questionnaires, thermo-scanning of skin temperature and, if necessary, core temperature screening, before entering their work areas. Employees with abnormal temperatures will be isolated at dedicated areas at the operations and then transported to designated medical facilities for diagnosis and, if necessary, testing, quarantine and/or hospitalisation.

A key part of Implats’ Covid-19 strategy has been to identify potentially vulnerable employees and to institute additional specific precautionary measures to increase protection. This includes the provision of vitamin and dietary supplements, flu vaccinations, and critical medical screening. In addition, employees have been provided with pre-packaged supplies of chronic medication for a period of six months to ensure high-risk employees do not need to visit hospitals or clinics during this time. Suitable temporary company accommodation is also being availed to employees who may not be able to self-isolate or practise recommended social distancing measures when not at work.

How does Implats view the next few years with its African operations?

Implats’ key projects and business development activities are focused on low-cost, predominantly mechanised assets that can deliver defensive cash generation to entrench the Group’s competitive position and sustain profitability well into the future. Our organic growth at our African operations focuses on the 12 Shaft and 16 Shaft projects at the Impala Rustenburg operation, and the Mupani Mine project at Zimplats.

  • Impala Rustenburg’s 16 Shaft: Steady-state 6E production of 330 000 ounces per annum is expected from June 2022. At the half-year ended 31 December 2019, capital spend has totalled R7.5 billion of the R7.9 billion approved project vote.
  • Impala Rustenburg’s 20 Shaft: The capital project scope has been completed with final expenditure of R7.9 billion. The focus at 20 Shaft remains on creating mineable face to meet the planned ramp-up in stoping tonnes.
  • Zimplats’ Mupani Mine: Development at Mupani Mine, which will replace the Ngwarati and Rukodzi mines, remains ahead of schedule. The mine will receive the first stoping fleet from Rukodzi in the final quarter of FY 2020. A total of $80 million out of the budgeted $264 million had been spent by the end of the half-year ended 31 December 2019.

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