Implats cuts platinum forecast

The news of a 50,000oz reduction in Impala Platinum’s refined platinum output forecast was largely ignored by the market, which focused on improved production from the group’s South African mines.

The news of a 50,000oz reduction in Impala Platinum’s (Implats’s) refined platinum output forecast was largely ignored by the market, which focused on the improved production from the South African mines.

Implats, the world’s secondlargest producer of platinum, reported it had lowered its refined metal production forecast by 50,000oz to between 1.51-million and 1.56-million ounces for the financial year to end-June 2018.

While the 50,000oz was valued at R1.25bn at prevailing prices, Implats had more than 120,000oz of refined platinum group metals in its vaults to draw down if it needed to sell more metal during the year, said spokesman Johan Theron.

BMO Capital Markets said: “Although we expect no material changes to our full-year forecast, production and sales are now expected to be biased towards the second half of the year, with the potential for some cost-capex increase due to planned refurbishment work.”

Implats had R7.8bn of cash by the end of June and R4bn in unutilised debt facilities. Capital expenditure for the year was pegged at R4.7bn.

Implats’ shares closed 3.2% higher at R39.22.

In its first-quarter production update to end-September, Implats noted that its milled tonnes were 9.6% higher as its greater management focus on the mines around Rustenburg turned in their strongest three months for three years.

Across the group’s entire portfolio its own mines and those in joint ventures reported platinum in concentrate of 349,000oz, a 7% increase compared with the same period a year earlier. However, because of planned furnace maintenance in SA and Zimbabwe, firstquarter refined output was 6.6% lower at 341,200oz.

“Despite the refined production miss, at the mine level, platinum in concentrate production was stronger across the operations, excluding Two Rivers,” BMO said.

During the year, Implats became aware of the need to rebuild its Number 5 furnace. which would return to production in December.

The firm’s end-June forecast for the financial year ahead was for production of between 1.57million and 1.61-million ounces of platinum, which remained intact. It was the refined output that was lowered.