Platinum miner Impala Platinum (Implats) has had to battle with debilitating power cuts in its Southern African operations, the group told shareholders.
The company said on Tuesday that production for the nine months to end-March was hamstrung by load curtailment in its key markets of SA and Zimbabwe.
It said refined and saleable production fell 9% to 2.14-million ounces in the period due to the timing of processing maintenance and increased frequency and severity of load curtailment in both countries.
In addition to load curtailment at SA-managed and joint venture operations, severe load-shedding was also experienced across the Zimbabwean national grid in March 2023 due to generation constraints at Hwange Power Stations and “the curtailment of power imports following payment challenges”, said the company.
“Given the constrained operating environment, production [for the full 2023 year] is likely to be towards the lower end of the previously guided range, while unit costs are trending towards the top end of the provided guidance.”
However, the mining house kept its outlook and guidance unchanged for the rest of its 2023 year despite the effects of power cuts, tough local operating conditions and a weaker rand.
CEO Nico Muller said load-shedding was a “notable impediment” to the group’s operational delivery, particularly in the past three months.
The company, valued at R149.7bn on the JSE, said in a production report for the three months and nine months to end-March that “volumes [are] trending towards the lower and costs increasing towards the upper boundaries” of its outlook for its year to end-June.
The outlook for 2023 is 3-million ounces to 3.15-million ounces in refined 6E platinum group metals (PGMs) — platinum, palladium, rhodium, ruthenium, osmium and gold — production.
In the latest quarter, the group’s 6E PGMs production fell 5.4% year on year to 735,000oz and sales volumes 10.3% to 752,000oz following lower production, more load-shedding in SA and Zimbabwe and less smelting capacity because of scheduled maintenance.
“The scheduled rebuild of the Number 4 furnace, which began in November 2022, was completed as planned at the beginning of April, but experienced some delays in recommissioning due to constrained power availability,” Implats said on Tuesday.
In the year to date, the group’s total gross 6E production decreased 2.1% to 2.35-million ounces and sales volumes 4.9% to 2.27-million ounces.
Implats has until recently been in a tussle to bring Royal Bafokeng (RBPlats) into its fold with Northam Platinum, but was given a boost last month when Northam pulled the plug on a possible deal, citing the drop in PGM prices since it made a cash offer of R17bn in December for the mid-tier miner.
Implats said on Tuesday that it now holds a 45.09% interest in RBPlats, which owns sought-after shallow and high-quality PGMs.
The miner has extended its cash and share offer until the pending receipt of the takeover compliance certificate from the mergers & acquisition watchdog. It is offering R90 a share in cash, as well as 0.3 of an Impala share.
“Implats has extended the longstop date set for fulfilment or waiver of the conditions precedent to May 31 2023, and continues to engage with key stakeholders,” the company said.
The Public Investment Corporation (PIC), which manages more than R2.5-trillion on behalf of government employees, is the potential kingmaker in the proposed deal with its shareholding at about 9%.
PGMs are used primarily to cut harmful emissions from internal combustion engines and for making jewellery. PGMs prices appear to have bottomed out after falling precipitously in recent months. With Andries Mahlangu
Update: May 2 2023
This article has been updated with new information.
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