An improved price for the metals Impala Platinum produces has given it flexibility in how it pursues its restructuring, a process to which the board has an unswerving commitment, says CEO Nico Muller.

While the platinum price has remained depressed, the strong surges in sister metals palladium and rhodium have given the SA industry some respite.

There is some hope that in the next year or two the platinum price will stage a recover as the metal is reintroduced into autocatalysts in petrol-powered engines, substituting the more expensive palladium, Muller said.

The global palladium market is in a structural deficit and has been for many years as demand outstrips supply from Russia and SA, the two largest sources of the metal.

With the palladium price more than $500/oz more expensive than platinum, which is trading at about $812/oz and no signs of palladium supply matching demand any time soon, autocatalyst makers are moving closer to substituting palladium with platinum, Muller said.

There are no short-term levers to pull to increase palladium by any miners, particularly in SA, where the bulk of platinum group metal (PGM) mining is underground and it takes years to build news mines or develop access to reefs with a higher palladium content, Muller said.

The work Implats, the world’s second-largest platinum miner, has done with its mines so far, with the introduction of Mark Munroe to oversee the core yet unprofitable asset base in Rustenburg combined with an improved average PGM price has given the company rare flexibility in how to fulfill its restructuring strategy, he said.

The new pricing environment has improved the economics of the shafts Implats has earmarked as noncore, raising the potential for a third party to do a deal on them, he said.

While the lives of shafts 1 and 9 are short and unlikely to attract interest, meaning they will be closed soon, the longer-life 12 and 14 shafts, which could be operated as a combined unit, are now becoming more attractive.

Talks between Implats and neighbour Sibanye-Stillwater to extend the life of 1 shaft by mining into Sibanye’s resources have stalled. Sibanye is in the throes of a transaction to take over Lonmin. Until that is finalised there is unlikely to be any deal between Implats and Sibanye.

Implats was not deviating from the strategy it unveiled in 2018 of having a long-term sustainably profitable business by stopping or terminating ownership of old, unprofitable mines, Muller said.

Implats outlined a R2.7bn, two-year restructuring process at its unprofitable Rustenburg operations last August, entailing the removal of up to 13,000 jobs and the closure or sale of five of its 11 mines to save the jobs of 27,000 people. Most of those jobs would go with assets earmarked for new owners.

“We have increased flexibility and optionality to the extent that as different options present themselves, with an increased value proposition to our shareholders and stakeholders, we will consider them and possibly implement them.

“It’s not our intention to make strategic decisions that deviate from our objectives because of short-term variations in market or operating performances,” he said.

In Zimbabwe, where an acute foreign exchange shortage is making business difficult, Implats, through its 80% stake in Zimplats, is one of the largest earners of dollars and an important element of the country’s economy.

President Emmerson Mnangagwa’s government’s efforts to attract investment and reassure existing investors of a business-friendly environment would be undermined by any restriction on the flow of money from the Zimplats’ operating subsidiary to the holding company to pay dividends, Muller said.

Implats, which has invested hundreds of millions of dollars in developing a 280,000oz a year platinum business in Zimbabwe over 18 years, received its first dividend payment in 2018 and Muller was unequivocal that these payments had to continue.