Analysts shrug off hiccups at start of new Implats year
Platinum miner sticks to its full-year refined output target despite difficulties in its first quarter
Impala Platinum (Implats) reported a 54% fall in first-quarter refined platinum coming from its own mines because of maintenance at its Zimplats smelter and acid plant in SA.
Implats, the world’s third-largest platinum miner after Sibanye-Stillwater and Anglo American Platinum, said refined platinum for the three months to end-September was 83,000oz from its own assets compared with 180,000oz in the same period a year earlier.
Third-party material going through its IRS refining plant in Springs increased to 197,000oz from 189,000oz. In total, refined platinum output was 281,000oz, down from 369,000oz.
“In-process inventory consequently increased during the quarter and is expected to be released over the remainder of the financial year,” Implats said, maintaining its full-year production forecast at between 1.45-million ounces and 1.55-million ounces.
Analysts said the lower refined number is not cause for worry.
“We are not too concerned about the Impala refined production number. These plant maintenance events do have a negative impact on working capital in the short term. However, this should unwind before year end if there are no unforeseen delays,” said Nedbank analyst Arnold van Graan.
The underlying operations are sound in SA, which is the heart of production, and at 79%-owned Zimplats, the largest platinum group metal producer in Zimbabwe.
At the No 1 shaft near Rustenburg, however, ore production fell as Implats advanced work to potentially hand over mining to a contractor as it winds down the old shaft.
“The sooner they move 1 Shaft to contractors the better because it will put the company in a better position to decisively deal with the shaft should it become unprofitable again,” said an analyst.
The grade going through the mills near Rustenburg dipped because of a higher level of dilution, which is when mineral-bearing ore is contaminated with waste rock, due to undulations in the underground reef at three of the shafts near Rustenburg.
Despite the headwinds, Implats maintained platinum in concentrate at a steady 186,000oz for the quarter.
At its joint venture operations, the quarter was a difficult one. At the Mimosa joint venture with Sibanye in Zimbabwe, an unplanned mill stoppage resulted in platinum in concentrate falling 16% to 25,000oz.
At the Two Rivers joint venture with African Rainbow Minerals in SA, the operation had an extended period of plant maintenance, difficulties at its concentrator combined with lower grade, resulting in a 23% fall in platinum in concentrate to 29,000oz.