Im­pala Plat­inum plans to end losses by 2019

Swazi Observer - - BUSINESS -

JO­HAN­NES­BURG - Im­pala Plat­inum Hold­ings Ltd. is aim­ing to stem losses at its big­gest op­er­a­tion by 2019 as the South African com­pany ad­justs to what may be a “new nor­mal” of low plat­inum prices.

The world’s sec­ond-largest plat­inum pro­ducer may close or sell some part of the “large and in­tri­cate” Rusten­burg min­ing com­plex and in­crease spend­ing on new shafts to R2.2 bil­lion over the next five years, the Jo­han­nes­burg-based com­pany said in a state­ment yes­ter­day.

The com­pany will as­sess each shaft and pro­duc­tion area at Rusten­burg to en­sure it can make money af­ter the plat­inum price fell by al­most a third over the past three years.

Out­look for de­mand is ham­pered by the growth of bat­tery-pow­ered electric ve­hi­cles, which don’t need the metal’s emis­sions-re­duc­ing prop­er­ties.

“It is clear that we can­not ac­cept it be­ing busi­ness as usual” for the Rusten­burg op­er­a­tions, the com­pany said. “A com­pre­hen­sive strate­gic review of this op­er­a­tion is planned toen­sure that it will op­er­ate at a cash-neu­tral level in what is per­ceived to be the new nor­mal pric­ing en­vi­ron­ment.”

Like ri­vals An­glo Amer­i­can Plat­inum Ltd. and Lon­min Plc, Im­pala has been strug­gling to cut costs quick enough to cope with the low plat­inum price and a strength­en­ing South African Rand, which pushes up ex­penses.

In ad­di­tion, Im­pala has been bat­tling to fix in­ef­fi­cient work­ing prac­tices and ab­sen­teeism at Rusten­burg. Rusten­burg will pro­duce 680 000 ounces to 720 000 ounces of plat­inum in this fi­nan­cial year, com­pared with 654 000 ounces in the 12 months through June, the com­pany said.

That will rise to 750 000 ounces by 2022, which is a re­duc­tion from pre­vi­ous tar­gets of as much as 800 000 ounces.

Im­pala needs a fur­ther 700 mil­lion rand over the amount raised in a 2015 fi­nanc­ing to com­plete the new shafts and will fund the spend­ing from its ex­ist­ing bud­gets, said Fi­nan­cial Di­rec­tor Brenda Ber­lin. BLOOMBERG

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