Implats Reports Mixed Results Amid Challenging PGM Market
Zimplats’ parent company, Implats, a leading platinum group metals (PGM) producer, has reported a mixed bag of results, with strong production and demand offset by lacklustre PGM prices, underscoring the need for the company to stay focused on cost management and operational efficiency to navigate the challenging market conditions.
Patricia Rwafa
Implats announced increased production on Tuesday, April 30th.
This comes despite weak prices for PGMs, although demand remains strong.
In the nine months that ended on March 31, the Johannesburg Stock Exchange-listed company recorded a 16% increase in total six-element (6E) group production volumes to 2.73 million ounces, with a 25% gain in managed volumes to 2.17 million ounces, a 4% increase in joint venture (JV) production to 410,000 oz, and a 31% decrease in third-party receipts to 149,000 oz.
Gross 6E refined and saleable production increased by 15% to 2.47 million ounces in the nine months, and 6E sales volumes increased by 11% to 2.52 million ounces.
According to CEO Nico Muller:
“Despite continued macroeconomic and geopolitical uncertainty, demand from our contractual customers remains robust, with elevated additional volumes requested via spot sales during the third quarter.
“PGM pricing remains lacklustre, however, with notable volatility in both platinum and palladium reflecting the continued influence of investor activity.
“Margins remain compressed, and we are pursuing a set of actions to ensure that each of our operations is set up to more robustly deliver sustainable free cash flow through the PGM cycle.
“It’s imperative that each of our assets operates within the appropriate volume, cost, and capital parameters relative to the current pricing environment and the broader operating context.”
“We delivered a commendable operational performance while navigating several challenges in the period under review. Investigations into the 27 November tragedy at 11 Shaft progressed, and the production ramp-up at the operation remains on track.
“The rebuild of Impala Rustenburg’s Number 5 furnace was completed, and the first matte has now been tapped. Notable operational performances were delivered by Zimplats and Mimosa, and at Impala Canada, where mining and milling were rebased,” he said.
In late April, Implats embarked on Section 189 (3) consultation process at its South African operations, which could affect 3,900 positions, equating to a 9% reduction in labour across the group’s Impala Rustenburg, Impala Bafokeng, and Marula operations, as well as at the corporate office, which is targeting a 30% reduction in head office costs.
Implats remains on track to deliver within the guided group parameters for the full 2024 financial year.
MARCH QUARTER
In the three months to March 31, gross group 6E production increased by 13% to 827,000 oz. Tonnes milled at managed operations increased by 16% to 6.48 million tonnes during the quarter. The maiden inclusion of Impala Bafokeng and higher milled volumes at Zimplats offset lower throughput at Impala Rustenburg, Marula, and Impala Canada.
The 6E milled grade of 3.64 g/t was stable, and 6E production at managed operations increased by 17% to 657,000 oz. The 6E production from the JVs at Mimosa and Two Rivers increased by 7% to 134,000 oz.
At Impala Refining Services, third-party 6E receipts of 37,000 oz were 23% lower than the prior comparable quarter as two contracts concluded in the financial year 2023. There were negligible production losses owing to load curtailment in South Africa in the quarter, although regional electricity generation and distribution challenges did pose headwinds to operating momentum in Zimbabwe.
Refined 6E production, which includes saleable ounces from Impala Canada and Impala Bafokeng, increased by 8% to 717,000 oz.
Implats finished the period with 410,000 6E ounces of excess inventory and 6E sales volumes of 824,000 oz, including saleable production from Impala Canada and Impala Bafokeng, which increased by 10% and were 3% lower on a like-for-like basis from those in the prior comparable quarter, with some destocking of refined inventory to offset the impact of the planned furnace maintenance.