Impala Platinum (Implats) said on Friday that output of its refined platinum group metals (PGMs) fell 9% in the six months to end-December, as scheduled load-shedding limited smelting capacity.
Implats, which is the world’s third-biggest producer of PGMs behind Anglo American Platinum (Amplats) and Sibanye-Stillwater respectively, said the estimated effect of the reduction in the use of electricity on concentrate and refined production was 9,000oz and 38,000oz, respectively.
Eskom has said that power rationing will be a reality for at least two years, meaning intensive energy users such as miners either have to absorb the status quo or find alternative energy sources to plug the power gap.
But miners are already in the process of procuring their own energy supply to take pressure off the national grid. According to Minerals Council SA, its members have 6,500MW of embedded energy projects in the pipeline. The 89 projects by 29 mining companies are worth more than R100bn, according to the council that represents mining groups.
Implats’s refined output declined to 1.476-million ounces in the six-month period, down from 1.617-million ounces in the same period the year before.
“Smelting capacity in the period was constrained by the increased occurrence and severity of load curtailment and exacerbated by the commencement of the scheduled rebuild of the No 4 furnace in Rustenburg,” Implats said.
Concentrate production was unchanged at 1.616-million ounces and the miner closed the half year with 140,000oz of excess inventory.
The PGM basket price dropped 9% in dollar terms on average but was more than offset by weaker rand, resulting in group sales revenue growing 5.2% to R38,117/oz sold. Its ebidta or core profit for the review period will remain unchanged at R24.5bn.
On Thursday, rival Anglo American Platinum reported a 37% decline in refined PGM production in the fourth quarter, blaming delays to the rebuilding of its Polokwane smelter, power outages and lower mine output and grades.
“As a member of the Energy Intensive Users Group, Amplats participates in load curtailment as requested by Eskom at the various stages of load-shedding and curtailment. Our operations are running at the capacity required and are as stable as possible to support grid stability,” Amplats said in a statement on Thursday.
“We have emergency-response plans to manage risks and evacuate employees safely in the event of prolonged power outages.”
Implats’s shares were 0.3% higher at R205.51 in mid-afternoon trade on the JSE, giving it a market valuation of R176bn.
With Reuters
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