Implats doing a review of shafts
Impala Platinum (Implats) has bumped its full-year refined platinum output down by 40,000oz because of problems with its furnaces. Implats is doing a review of its shafts around Rustenburg to cope with lower metal prices and to develop a plan for its many unprofitable shafts.
Impala Platinum (Implats) has bumped its full-year refined platinum output down by 40,000oz because of problems with its furnaces.
Implats is doing an extensive review of its shafts around the North West town of Rustenburg to cope with lower metal prices and to develop a plan around its many unprofitable shafts.
New CEO Nico Muller is pushing his team hard on developing a new strategy, which entails grouping shafts into three clusters. Under the plan older, unprofitable shafts would go into harvest mode, meaning no more capital will be spent on development, and mining will focus on extracting what is available. The big, mature mines will be restructured to be profitable and two new shafts will deliver lower-cost production.
“The elimination of high-cost production at Impala Rustenburg remains our key imperative.… I am happy to report that good progress is being made with this operation’s strategic review to align the business with our lower future metal prices outlook,” Muller said.
Based on third-quarter and nine-month results, work at the mine level seemed to pay off.
“While Implats’s operational performance has shown good improvement over the nine months ended March 31 2018, furnace challenges … will inhibit all the platinum produced in concentrate during the period from being fully refined before the financial year-end,” the company said in a release that contained just production data but no financial results.
Implats had forecast it would produce 1.5-million ounces of refined platinum in its 2018 financial year to end-June but it has now lowered this to 1.46million ounces. In the first nine months of its financial year, refined platinum production fell 6% to 1.042-million ounces because of furnace maintenance during the first six months and then an electrical failure at one of its furnaces in February.
The difficulties with the furnaces, which convert concentrate into a matte to feed into the refining plant, mean Implats has 100,000oz extra metal in its production pipeline.
“In an effort to moderate the negative cash flow impact [of the 100,000oz], management has sold forward some accumulated stock during January 2018 and will consider further mitigating measures on an ongoing basis,” the company said. Implats said its operating costs for the year would be between R23,600/oz and R24,200/oz, with capital expenditure peaking at R4.8bn.