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Implats implementing mitigating response to current PGMs price weakness

Marula platinum group metals mining operation.

Marula platinum group metals mining operation.

31st October 2023

By: Martin Creamer

Creamer Media Editor

     

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JOHANNESBURG (miningweekly.com) – Platinum group metals (PGM) mining and marketing company Implats is implementing a comprehensive operational and expenditure response to mitigate the current weakness in PGMs pricing and the resultant pressure on margins.

“It’s imperative that all our operations are set up to contribute sustainably and profitably through the vagaries of PGM cycles,” Implats CEO Nico Muller stated in the JSE-listed company’s first quarter production report for the period of July 1 to September 30.

“Capital expenditure on projects considered key to strategic delivery will continue, but planned elevated levels of spend across the portfolio will be adjusted to reflect the prevailing current reality of compressed industry margins,” Muller stated in the release to Mining Weekly.

Total six element (6E) group production volumes increased by 21% from the previous comparable quarter to one-million ounces, with a 34% increase in managed volumes to 799 000 oz, stable production of 141 000 oz from joint ventures, and a 31% decrease in third-party receipts to 62 000 oz.

While production metrics benefitted from the maiden inclusion of Impala Bafokeng in the period, notable improvements were achieved on a like-for-like basis at the group's mining and processing operations.

Gross 6E refined and saleable production volumes increased by 25% to 885 000 oz and 6E sales volumes increased by 17% to 829 000 oz.

“The strong operational delivery in the period is a testament to the flexibility and resilience our people enabled at our operations — with targeted investments in asset integrity and projects focused on harnessing the inherent competitiveness of our mining and processing portfolio yielding notable improvements.

“Volume gains offset persistent industry-wide inflationary pressures and the operational impact of load curtailment was also minimised in the period. The integration of Impala Bafokeng gained momentum and focused efforts to improve and embed our safety performance remain a key focus,” said Muller.

Regrettably, Marula and Impala Bafokeng operations each reported a fatality in the period amid 16% year-on-year improvement in the lost-time injury frequency rate and an 11% improvement in the all-injury injury frequency rate.

“Recent discussions with our core customer base confirm our underlying view of rising demand for our key products over the coming year. Residual customer caution reflects the persistent global macro-economic uncertainty and notable trade-flow shifts in primary mined supplies, resulting in adjustments to market liquidity and pricing,” Muller added.

PRODUCTION

Gross tonnes milled at managed operations increased by 29% to 7.55-million tonnes during the quarter, augmented by the maiden inclusion of Impala Bafokeng, with 9% gains on a like-for-like basis. Milled grade increased by 4% to 3.77 g/t and 6E concentrate production at managed operations increased by 34% to 799 000 oz, with a like-for-like improvement of 12% from the collective production base at Impala Rustenburg, Marula, Zimplats and Impala Canada. Concentrate production from the joint ventures (JVs) at Mimosa and Two Rivers was stable at 141 000 oz.

Third-party 6E concentrate deliveries to Impala Refining Service declined by 31% to 62 000 oz reflecting the conclusion of two contracts in the third quarter of the previous financial year.

Consequently, group 6E gross production volumes increased by 21% to one-million ounces, 5% higher on a like-for-like basis.

Refined 6E production, which includes saleable ounces from Impala Canada and Impala Bafokeng, increased by 25% to 885 000 oz.

Production at Impala Rustenburg benefitted from previous investment in asset integrity and operational flexibility, specific internal interventions, and fewer external interruptions.

Impala Bafokeng’s BRPM operations delivered to plan in the quarter, but performance at Styldrift was negatively impacted by a lengthy Section 54 safety stoppage following the fatal accident in September 2023, while milled volumes were impeded by a primary crusher breakdown.

Performance at Marula was negatively impacted by a Section 54 safety stoppage and subsequent audits following the fatal accident at the operation in August 2023. Milled volumes declined by 7% to 487 000 t, while milled head grade regressed by 4% to 4.30 g/t. Consequently, 6E-in-concentrate production was 15% lower at 58 000 oz.

Operating momentum at Two Rivers continues to be impeded by adverse geological conditions, unplanned equipment breakdowns and a high turnover of critical skilled labour.

Implats continues to engage extensively with its JV partner to ensure the appropriate technical support and assistance is provided to operational management at the mine as the upper group two mining footprint is expanded and the Merensky project progressed.

At Zimplats in Zimbabwe, tonnes milled increased by 13% to 1.95-million tonnes, benefitting from the third concentrator plant operating for the full period, while the 50 MW power import agreement with the Zambia Electricity Supply Company resulted in stable power supply during the quarter.

At Mimosa, also in Zimbabwe, production volumes continued to be impacted by intermittent domestic power interruptions and a scheduled plant shutdown in the period. Tonnes milled improved by 3% to 702 000 t, while milled grade was adversely impacted by poor geology and declined by 5% to 3.61 g/t. Yield improvements from the plant optimisation project resulted in a 1% increase in 6E concentrate production to 62 000 oz.

At Impala Canada, tonnes milled declined by 5% to 900 000 t, with a 12% higher grade of 3.12 g/t resulting in a 7% increase in 6E volumes in concentrate to 74 000 oz.

At Impala Refining Service, mine-to-market 6E receipts from Zimplats and Marula improved by 10% to 223 000 oz, while receipts from Two Rivers and Mimosa rose 6% to 145 000 oz.

Third-party 6E receipts declined by 31% to 62 000 oz, reflecting the cessation of deliveries from two customer contracts in the third quarter of Implats’ last financial year. Refined 6E production benefitted from improved operating rates at the group’s processing facilities, which helped counter the production impact of intermittent load curtailment. Consequently, refined production was 15% higher at 392 000 oz in the three months under review.

Edited by Creamer Media Reporter

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