The operational momentum of Impala Platinum (Implats), which operates platinum group metals (PGMs) mines in SA, Zimbabwe and Canada, has been hit by problems at Eskom as SA battles with the worst power cuts on record.
This led to an increase in load curtailment, an agreement between the power utility and Implats whereby the miner can reduce its power demand through operational adjustments if Eskom gives it enough notice that it is struggling to meet demand. In 2022, SA has been battling with some of the worst load-shedding on record since it started in 2008.
“The increased severity and frequency of load curtailment by power utility Eskom necessitated adjustments to hoisting, concentrating and smelting rates in SA, which adversely impacted operational momentum during the quarter,” CEO Nico Muller said on Friday in a production report for the quarter to end-September.
“In addition, socioeconomic pressures are being compounded by rising global inflation, which in SA has been further aggravated by the recent rand depreciation,” he added.
These include high input costs, such as the price of diesel, because of higher inflation. High inflation also led to most central banks around the world hiking interest rates, while the fallout from the war in Ukraine continues, and traders trying to find solace in the dollar as a safe haven investment amid turmoil on global markets.
Despite this, Implats, valued at R158.99bn on the JSE, expects its revenue to remain robust as discussions with its core customer base indicate there will be rising demand for its key products in the coming year.
Gross production increased 1.65% year on year to 5.85-million tonnes, most of which came from Impala Rustenburg and Zimplats in the north of Zimbabwe.
However, it warned that the price of platinum group metals (PGMs) will remain volatile to macroeconomic factors.
“We are determined to maximise the tailwinds of strong prevailing PGM prices and deliver our guided business performance in the 2023 financial year for the benefit of all our stakeholders,” Muller said.
Implats is keeping its guidance for the financial year unchanged, but noted that group unit costs and capital expenditure could come under pressure from the depreciation of the rand due to the translation of the dollar cost base at Impala Canada and Zimplats. The rand has depreciated 10.80% against the greenback so far in 2022.
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