‘Mr Safety’ leaves Implats with regret over deaths
IT was four years ago, in 2012, that Terence Goodlace took office at Impala Platinum, preaching the importance of safety in mines.
Most commentators know how clear he was when he urged that if one could not mine safely then one should not mine at all.
In 2016, he leaves the company while still preaching the importance of safety in mines.
However, Goodlace steps down as the CEO of the world’s secondlargest platinum producer with sadness because of the accidents that led to 11 fatalities in the 2016 financial year.
“I’m sitting here with goosebumps now because they [the deaths] really have hurt us as an organisation,” Goodlace said at the company’s 2016 annual results presentation earlier this week.
Kobus Nell, portfolio manager at Stanlib, said it was regrettable that safety had been compromised, especially when someone like Goodlace was so focused on it.
“It was frustrating. When he came in, his focus was very much on safety, and with that kind of focus it’s been unfortunate for the company,” Nell said.
Goodlace said Implats had spent R1-billion on improving safety over the past four years and he hoped that the new safety devices installed in all its shafts would prevent ground collapses.
Makwe Masilela, portfolio manager at BP Bernstein, said that mine deaths could be due to a number of reasons; a low level of interest in work due to the depressed period the sector was experiencing was one of them.
When a company was cutting costs, no one knew to what extent safety was being affected, he said.
Implats was hit by the drop in commodity prices in the second half of 2015, which led to a rights issue of R4-billion in October to invest in two of its shafts.
Earnings dropped by 67% in 2016 although the company increased its production by 12.7% in the same period.
Despite all the setbacks suffered during the year, with shafts being closed, workers being retrenched and safety stoppages, Implats has been the best performer in the platinum mining index, up by 147% in the year to date.
The company said it would increase its production guidance for 2017 to 1.5 million ounces of platinum from 1.44 million this year. This took into account the safety stoppages that were persisting in its Rustenburg operations.
Given the global platinum deficit, which would only deepen until 2025, Implats hopes to produce about 830 000 ounces of platinum from the help of its two newly developed shafts by 2020. The 2017 forecast was between 700 000 and 710 000 ounces.
Nell said that Implats shares had been performing better than other platinum miners, and the production guidance was “encouraging”. But given the company’s disappointing track record when it came to its ramp-up strategy, people might be sceptical about the production forecast of the new shafts.
“If they [Implats] can stabilise the operating environment, then they can achieve that,” he said.
In the past year Impala had closed two shafts that were operating at a loss, put 17 shaft on care and maintenance, and laid off about 3 300 workers. No 14 shaft, where four workers lost their lives in a fire in January, was undergoing rehabilitation and had cost the company R317-million.
Apart from all the other troubles facing the industry, the platinum sector is in wage talks. Such talks have caused many financial and operational headaches for mining companies in the past.
Implats said the negotiations were still at an early phase but it was confident that the mistakes of past negotiations would not be repeated.