Implats CFO Brenda Berlin
JOHANNESBURG (miningweekly.com) – JSE-listed mining company Impala Platinum (Implats), which last year initiated court proceedings against a US recycler for $182-million, has put the lawsuit on hold and opted for a process of professional mediation, which begins on Monday.
Implats CFO Brenda Berlin said in response to Mining Weekly Online that should the mediation with US company A-1 Specialised Services & Supplies Inc. fail, there was agreement that the case would be brought before the London Court of International Arbitration rather than taken through the US courts.
Berlin described the current course of legal events as being positive in that potentially lengthy jurisdictional disputes were obviated.
“That’s already pre-agreed and it all starts on Monday,” Berlin told Mining Weekly Online.
A-1 Specialised, a recycler of autocatalyst materials, has had a long-standing association with Implats’ Impala Refining Services (IRS) and supplied platinum scrap to IRS on a regular basis until a few years ago, when it ceased deliveries of all material.
As a consequence, Implats took an initial impairment of R212-million against amounts allegedly owed by A-1 and later impaired the full remaining carrying value in the accounts of R1.2-billion after alleged default on agreed payment terms.
After supplying materials to Implats since the nineties, the company went into default after the global economic crash of 2008 and its refining contract ultimately lapsed.
A-1 describes itself on its website as a global leader in the recycling of platinum-group metals from salvage catalytic converters, and an active marketer of platinum, palladium and rhodium to meet consumer needs.
The supply of the platinum from recycled automotive converters has represented a significant portion of new metal each year.
IRS paid R791-million more for the metals it bought in the six months to December 31 owing to higher rand prices and increased volumes.
The R1.4-billion increase in sales was mostly attributable to revenues related to the higher metal purchases.
As a result, gross profit declined by 29% to R1.8-billion and the associated gross margin declined from 16% to 11%, mainly owing to mining inflation at 10.2% and the increase in lower-margin third-party purchases by IRS.
"The third-party opportunities to enhance the IRS business will be continued," Implats CEO Terence Goodlace said at the latest presentation of results.