After concluding a cross-cutting labour restructuring and adjusting its operating parameters, Impala Platinum’s (Implats) 6E production during the half year to December decelerated by 4%, tipping downwards its earnings for the interim period by up to 44%.
Implats rationalised its operations, instituting retrenchments as a response to the continued low rand pricing for platinum group metals (PGM). Furthermore, its prospects during the half year period faced headwinds such as water and power interruptions, with operating units such as Zimplats in Zimbabwe being hardest hit.
“Impala Rustenburg and Impala Bafokeng navigated safety stoppages following loss-of-life accidents,” said the company.
According to CEO Nico Muller, Implats could be forced to wind down its Canadian palladium mine if prices do not recover quick enough. He said mothballing the Canadian mine would be the “economically most effective way” of handling it.
Regarding the period under review, Implats’ 6E production slowed down by 4% to 1.82 million ounces although refined and saleable 6E production rose 2% to 1.79 million ounces, benefitting from “increased available processing capacity despite intermittent interruptions” water and power at the processing facilities.
Still, the company closed the half year period with excess inventory of 375 000 6E ounces.
Despite the cost control measures implemented, group 6E unit costs increased 3% to R20 885 per ounce. The company’s cost control measures came on top of easing input inflation and a lower labour complement that was bolstered by rand appreciation on the translated dollar cost base at Zimplats and Impala Canada.
this was against a capital expenditure reduction out-turn of 42% at R3.9 billion, with the US dollar revenue per 6E ounce sold down 3% to $1 334. The rand revenue per 6E ounce also declined 8% to R23 831.
This resulted in Implats earnings before interest, tax, depreciation and amortisation falling by 43% and 44% to R1.85bn or 206 cents per share respectively.
“Profit in the prior comparable period was impacted by two once-off, non-cash items relating to impairments of property, plant and equipment at each of Impala Canada and the Two Rivers JV,” said the company.
This came as weak consumer and investor sentiment weighed on commodity pricing despite tightening near term outlooks for platinum, palladium and rhodium. These metals are expected to remain in deficit in 2025.
Despite the earnings plunge, Implats said it had managed to advance “its suite of strategic mining, processing and energy projects designed to optimise operational efficiency and ensure the long-term sustainability” of its mining and processing assets.
This includes the successful ramp-up to full power of Zimplats 35MW solar plant, part of a planned 185MW solar complex and the technical completion of Zimplats’ smelter expansion and Impala Refineries’ base metals refinery (BMR) debottlenecking project.
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