Impala Platinum (Implats), the world’s third-biggest platinum miner, says operational challenges, including load-shedding, have weighed on production in the last six months of 2021, while it warns of extended maintenance at one of its furnaces in Rustenburg.
Refined production of the basket of six metals the group produces fell 5% to 1.62-million ounces in its half-year ending December, Implats said in a trading update on Tuesday, with a stronger rand mostly offsetting higher prices.
Extended safety stoppages, intermittent industrial action and power supply interruptions at Impala Rustenburg had a notable effect on production, Implats said. The Covid-19 pandemic continues to be felt in constrained labour and skills availability and elevated absenteeism.
Implats said one of its Rustenburg furnaces was scheduled for a partial rebuild during the first three months of 2022, but a decision has been made to undertake a full rebuild, extending the maintenance period to about four months.
“The operational impact of the hard lockdown and inconsistent power supply arising from Eskom load curtailment measures resulted in accelerated wear,” Implats said.
The miner said it is assessing the expected effect on second-half production and will provide an update when it releases its interim results, scheduled for March 1.
Revenue per ounce sold lifted 1.7% in the interim period, with the stronger rand largely offsetting a 10% rise in prices.
Implats says its earnings are expected to differ at least 20% from the prior comparative period, with basic earnings benefiting in the prior period from the reversal of impairment losses on property, plant and equipment and the prepayment of royalties. The impairment reversal was due to changes in the estimates, particularly long-term metal prices, used to determine the recoverable amount of Impala Rustenburg assets.
The weighted average number of shares in issue has also risen about 5%, after the issue of 30.6-million Implats shares as part of the acquisition of shares in Royal Bafokeng Platinum (RBPlat).
Implats has built up a stake of more than 35% in RBPlat, triggering a mandatory bid, with the former offering R90 per share along with 0.3 of its own shares for each of those it acquires. This has valued RBPlat at more than R43bn.
At 3pm on Tuesday Implats’s share price was down 3.77% to R225.47, while they are up about 60% over the past two years, roughly since the start of the pandemic.
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