IMPALA PLATINUM HOLDINGS LIMITED - Third quarter production report for the period 1 January to 31 March 2015
14 May 2015 14:47
IMP 201505140027A
Third quarter production report for the period 1 January to 31 March 2015
IMPALA PLATINUM HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1957/001979/06)
JSE Share code: IMP
ADR code: IMPUY
ISIN: ZAE000083648
(“Implats” or “the Group”)
Third quarter production report for the period 1 January to 31 March 2015
Unaudited Unaudited Unaudited Unaudited
Operational information Quarter ended Quarter ended Nine months Nine months
31 March 2015 31 March 2014 31 March 2015 31 March 2014
Implats Gross Refined Production
Platinum 000oz 301 205 932 992
Palladium 000oz 176 126 589 595
Rhodium 000oz 37 32 126 129
Nickel 000t 3.75 3.21 11.58 11.31
Impala
Tonnes Milled 000t 2 509 273 6 516 6 120
Grade (6E) g/t 4.18 4.26 4.22 4.33
Merensky Ore Milled % 45.5 12.8 47.3 43.2
Refined Platinum Production 000oz 143 21 396 411
Marula
Tonnes Milled 000t 373 399 1 202 1 329
Grade (6E) g/t 4.21 4.23 4.16 4.25
Platinum in Concentrate 000oz 16 17 53 59
Zimplats
Tonnes Milled 000t 1 263 1 423 3 741 4 404
Grade (6E) g/t 3.47 3.46 3.47 3.55
Platinum in Matte 000oz 52 58 155 174
Mimosa
Tonnes Milled 000t 622 569 1 923 1 804
Grade (6E) g/t 3.93 3.94 3.92 3.94
Platinum in Concentrate 000oz 28 27 88 79
IRS
Refined Platinum Production 000oz 158 184 536 581
Unit Cost
Implats unit cost (excluding SBP) R/oz 22 814 29 331 22 899 18 304
Prices Achieved
Platinum US$/oz 1 214 1 400 1 288 1 419
Palladium US$/oz 790 730 813 725
Rhodium US$/oz 1 177 993 1 211 979
Nickel US$/t 14 983 13 986 16 555 13 964
Average exchange rate R/$ 11.66 10.87 11.20 10.31
Revenue per platinum ounce US$/oz 2 174 2 400 2 284 2 272
R/oz 25 249 26 088 25 581 23 424
SAFETY
There were no fatal incidents during the quarter ended 31 March 2015 and the Group has
achieved six consecutive months without any fatal accidents. Regrettably, subsequent to the
quarter ended 31 March 2015 there were two tragic fatalities at Impala Rustenburg. Both
incidents were related to trucks and tramming, one in a conventional track bound section at E&F
Shaft and one in a trackless mining area at 12 Shaft. The board of directors of Implats
(“the Board”) and the management team have extended their sincere sympathies to the family,
friends and colleagues of Mr Orekeng and Mr Malimole. Safe production remains our principle
priority and we are committed to pursuing our vision of zero harm with renewed vigour.
At the end of March 2015, the ‘lost time injury frequency rate’ for the Group improved by 2%
from 3.92 per million man hours worked in FY2014 to 3.85 for FY2015 (year to date). During the
same period, the ‘all injury frequency rate’ improved by 25% from 11.90 achieved in FY2014 to
8.95 for the current financial year. However, the ‘fatal injury frequency rate’ deteriorated over
this period from 0.043 achieved in FY2014 to 0.055 per million man hours worked in the current
financial year, following five fatalities reported during the first quarter of the financial year.
PRODUCTION
Gross refined platinum production for the quarter ended 31 March 2015 increased by 47% to
301 000 ounces of platinum, compared to 205 000 ounces platinum in the prior comparable
period. The increase is largely as a result of the strike impact at Impala Rustenburg during last
year’s March quarter.
Notwithstanding this increase, gross refined platinum production for the nine-month period
ended 31 March 2015 decreased by 6% from 992 000 ounces platinum achieved in the previous
comparable period, to 932 000 ounces platinum in the current financial year. This decrease is
directly as a result of the wage strike impact, lower volumes from Zimplats as a result of the
temporary closure of the Bimha Mine, safety and industrial action stoppages during the first half
of the financial year at Marula and lower throughput at Impala Refining Services (IRS) due to the
treatment of once-off material in the prior comparable period. This was all mitigated to some
extent by the improved performance at Impala Rustenburg this quarter and further operational
improvements at Mimosa.
Impala
Tonnes milled at Impala Rustenburg improved from the strike-impacted quarter ended
31 March 2014 (273 000 tonnes) to 2.51 million tonnes during the quarter ended 31 March 2015,
which is similar to the performance reported for the non-strike impacted quarter ended
31 March 2013 at this operation (2.36 million tonnes). Consequently, refined platinum
production for the quarter improved to 143 000 ounces platinum for the period under review.
Tonnes milled over the nine-month period increased by 6.5% to 6.52 million tonnes, compared
to 6.12 million tonnes in the prior corresponding period. Production over this period was
impacted by the operational re-start and ramp-up to full production following the Association of
Mineworkers and Construction Union (AMCU) wage strike and safety related stoppages, which
amounted to approximately 400 000 tonnes year to date. Notwithstanding the increase in tonnes
milled, refined platinum production for the financial year to date declined by 4% to 396 000
ounces platinum compared to the prior corresponding period. This is directly attributable to
reduced smelter stock levels at the end of the strike-impacted prior comparable period,
compared to the current nine month period under review.
Available mineable face (demonstrating ore reserve flexibility) for conventional mining crews at
Impala Rustenburg improved further during the reporting period, increasing from 17 800 meters
in March 2012 to 22 103 meters at the end of March 2015 (compared to a longer term strategic
target of 24 200 meters). This will not only continue to improve ore reserve flexibility for each
conventional panel team in the short term, but also allow more panel teams to be deployed over
time to deliver the strategic target of 850 000 platinum ounces per annum at much higher mining
efficiency and at lower unit cost.
The operation continued to experience power interruptions during the quarter under review, but
was able to mitigate these impacts through power curtailment and power shifting to off-peak
periods at the smelting facility. Production guidance for the full financial year is maintained at
575 000 platinum ounces. However, excessive safety stoppages following the recent two tragic
fatalities at Impala Rustenburg and escalating power constraints may impact planned production
performance in the final quarter of the current financial year.
Marula
Tonnes milled at Marula decreased by 6.5% to 373 000 tonnes for the quarter ended March
2015 compared to 399 000 tonnes reported in the prior corresponding period. Platinum in
concentrate production for the quarter decreased in line with the lower mill throughput to 16 000
ounces platinum.
Tonnes milled over the nine month period ended 31 March 2015 decreased by 9.5% to
1.20 million tonnes, compared to 1.33 million tonnes in the prior corresponding period.
Production over this period was severely impacted by safety and industrial action stoppages in
the first six months of the current financial year and power supply interruptions in the quarter
ended 31 March 2015. This impacted the processing plant and resulted in a build-up of some
mined ore at the end of the reporting period. In line with this decrease in tonnes milled, platinum
in concentrate production for the financial year to date declined by 10% to 53 000 ounces
platinum.
Marula operates without a large on-site smelting complex and therefore has limited ability to shift
power demand during periods of constrained supply. Consequently, the operation is required to
stop the milling plant during periods of interrupted power supply and to stockpile ore which can
then be treated at a later stage. Considering the mining performance (tonnes milled and
stockpiled) during the quarter ended 31 March 2015, it is apparent that the strategic
interventions to regain lost momentum at this operation are showing pleasing progress.
Zimplats
Tonnes milled at Zimplats during the quarter ended 31 March 2015 decreased by 11% to
1.26 million tonnes compared to 1.42 million tonnes reported in the prior corresponding period.
Platinum production in matte for the quarter consequently decreased in line with lower mill
throughput to 52 000 ounces platinum for the period under review.
Mill throughput over the nine-month period ended 31 March 2015 decreased by 15% to
3.74 million tonnes, compared to 4.40 million tonnes in the corresponding prior period. The
lower throughput was directly attributable to the safety closure of the Bimha Mine in
August 2014, mitigated to a large degree by the successful re-deployment of affected mining
crews to other mining areas as well as the continued ramp-up of the Phase 2 expansion project.
As a result, platinum in matte for the nine months ended 31 March 2015 was only 11% lower at
155 000 ounces, compared to 174 000 ounces platinum in the prior comparable period.
The re-development of Bimha Mine and the initiation of open-pit mining to mitigate the
production impact is progressing well, with the first open-pit material expected to be processed
in April 2015.
The ramp-up of the Phase 2 expansion project remains on schedule for completion in FY2015
with the Mupfuti Mine expected to deliver steady-state capacity of 90 000 ounces of platinum in
the next financial year. All of the above interventions are expected to limit the production impact
of closing Bimha Mine to less than 40 000 platinum ounces for FY2015 and for full processing
capacity (6.0 million tonnes per annum) to be restored in FY2016.
Zimplats continues to engage with the Government of Zimbabwe with regards to the
indigenisation implementation plan and the securing of a more conducive regulatory and fiscal
framework for the mining industry in Zimbabwe.
Mimosa
Tonnes milled at Mimosa increased by 9% to 622 000 tonnes for the quarter ended
31 March 2015 compared to 569 000 tonnes reported in the corresponding prior period.
Platinum in concentrate production for the quarter increased as a result of the increased mill
throughput to 28 000 ounces.
Tonnes milled during the nine-month period ended 31 March 2015 increased by 7% to 1.92
million tonnes, compared to 1.80 million tonnes in the corresponding prior period. The increased
throughput together with improved recoveries increased platinum in concentrate production by
11% to 88 000 ounces compared to 79 000 ounces platinum in the prior comparable period.
On 30 January 2015, Implats informed shareholders that a 15% export levy on unbeneficiated
platinum concentrates in Zimbabwe became effective from 1 January 2015 and advised
shareholders that implementation of this levy would have a material impact on the profitability
and sustainability of Mimosa. The group in consultation with the Chamber of Mines in
Zimbabwe, initiated active engagement with the Government of Zimbabwe to highlight this risk
and in an endeavour to secure a more conducive investment environment where current
operations can be sustained and ultimately the industry grown in Zimbabwe. These
engagements are ongoing, and further announcements will be made as soon possible.
IRS
IRS refined platinum production during the nine-month period ended 31 March 2015 decreased
by 8% to 536 000 ounces, compared to 581 000 ounces. The decline in production is largely
attributed to the once-off treatment of material in the prior comparable period.
PRICES
Platinum has traded approximately 9% lower in the nine-month period ended 31 March 2015
averaging US$1 288 per ounce compared to US$1 419 in the corresponding prior period.
Palladium averaged US$813 per ounce, 12% higher and rhodium traded at US$1 211, 24%
higher than the previous period. The dollar basket price received over the nine-month period
was similar to the basket price received in the prior comparable period (0.5% higher).
The Rand/US$ exchange rate over this period provided some respite, depreciating by 9% to
average R11.20 to the US dollar, compared to a rate of R10.31 in the corresponding prior
period. The resultant Rand revenue per platinum ounce consequently increased by 9% to
R25 581 per platinum ounce for the nine-months ended 31 March 2015.
GROUP UNIT COSTS
In line with reduced platinum production, group unit costs have increased by 25% to R22 899
per platinum ounce compared to R18 304 achieved in the corresponding prior period. The
primary reason for this, over and above normal inflationary increases, was the funding and
impact of the ramp-up at Impala Rustenburg and the temporary closure of Bimha Mine.
OUTLOOK
While the fundamentals for PGMs remain robust, and Implats is strongly focused on improving
operating efficiencies while delivering on its capital projects for a sustained and profitable future,
the current Eskom crisis remains a serious issue. As a ‘Key Customer', or an ‘Energy Intensive
User', Implats is in continual discussion with Eskom to manage these disruptions as best
possible. The Group has a comprehensive electrical power control system in place, and the
electrical power usage profile has been adjusted to offset the national power grid requirements.
However, the Group’s ability to further reduce power consumption is limited and, while further
energy efficiency opportunities continue to be investigated, more frequent and/or severe power
constraints will severely impact production into the future.
The third quarter production report for the nine months ended 31 March 2015 has not been
reviewed and reported on by the external auditors of Implats.
Queries:
Johan Theron Alice Lourens
Group Executive: Corporate Relations Group Corporate Relations Manager
E-mail: Johan.Theron@implats.co.za E-mail: Alice.Lourens@implats.co.za
Tel: +27 11 731 9013/43 Tel: +27 11 731 9033/43
Cell: +27 82 809 0166 Cell: +27 82 498 3608
14 May 2015
Johannesburg
Sponsor to Implats
Deutsche Securities (SA) Proprietary Limited
Date: 14/05/2015 02:47:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.