Implats, a well-known mining and marketing company that specializes in platinum group metals (PGMs), has announced that its production has increased despite ongoing global economic uncertainties and less-than-stellar market prices for PGMs. This update was provided by Nico Muller, CEO of Implats, detailing the company’s performance for the period ending March 31, 2024.
Over the first nine months of the fiscal year, Implats reported a 16% increase in their total six-element (6E) group production volumes, rising to 2.73 million ounces. This growth includes a significant 25% increase in managed volumes, which totaled 2.17 million ounces, a modest 4% rise in joint venture (JV) production to 410,000 ounces, and a notable decrease of 31% in third-party receipts, which amounted to 149,000 ounces.
The demand from contractual customers has remained strong, and during the third quarter, additional volumes were requested via spot sales. However, the pricing environment for platinum and palladium has been challenging, with notable volatility due to ongoing investor speculation and activity. To address this challenge, Implats has been proactively taking strategic measures to optimize its operations for sustainable free cash flow throughout the PGM cycle. Muller has emphasized the importance of ensuring that each asset operates within the correct volume, cost, and capital parameters relative to the current market conditions.
In response to these operational imperatives, Implats initiated a Section 189 (3) consultation process in late April at its South African operations. This strategic move could potentially affect 3,900 positions, equating to a 9% reduction in labor across the group’s key operations, including Impala Rustenburg, Impala Bafokeng, Marula, and at the corporate office which is targeting a substantial 30% reduction in head office costs.
Despite these challenges, the company has maintained commendable operational performance. Muller highlighted the successful rebuild of Impala Rustenburg’s Number 5 furnace, with the first matte now tapped, marking a key milestone in operational capability. Additionally, outstanding performances were reported at Zimplats and Mimosa, and at Impala Canada where mining and milling operations were successfully rebased to adapt to new operational targets.
For the quarter ending March 31, the gross group 6E production saw an encouraging increase of 13% to 827,000 ounces. Managed operations milled 6.48 million tonnes during the quarter, marking a 16% increase from the previous period. This was buoyed by the inclusion of Impala Bafokeng for the first time and higher milled volumes at Zimplats, although throughput at Impala Rustenburg, Marula, and Impala Canada was lower.
The stable milled grade of 3.64 grams per ton and the increase in 6E production at managed operations by 17% to 657,000 ounces reflect the company’s effective response to operational demands. Production from JVs at Mimosa and Two Rivers also saw a rise by 7% to 134,000 ounces.
At the Impala Refining Services, third-party 6E receipts decreased by 23% to 37,000 ounces compared to the prior quarter, as two significant contracts concluded in the previous fiscal year. The quarter experienced negligible production losses due to load curtailment in South Africa, although regional electricity generation and distribution challenges in Zimbabwe posed additional operational hurdles.
Refined 6E production, including saleable ounces from Impala Canada and Impala Bafokeng, rose by 8% to 717,000 ounces. Implats managed to close the period with an excess inventory of 410,000 6E ounces, and the sales volumes for the quarter reached 824,000 ounces—an increase of 10% overall but a slight 3% decrease on a like-for-like basis from the previous comparable period, influenced in part by destocking activities related to planned furnace maintenance.
Implats remains on track to deliver within the guided group parameters for the full 2024 financial year. The company continues to focus on operational efficiency and strategic management to navigate the fluctuating market conditions. By maintaining stringent control over operational costs and enhancing production efficiency, Implats aims to ensure its resilience and sustained profitability in the face of ongoing global economic and market challenges.
Source: Mining Weekly
