Marula mine had to be temporarily closed because of Covid-19. Picture: IMPLATS.
Marula mine had to be temporarily closed because of Covid-19. Picture: IMPLATS.

Impala Platinum, the world’s third-largest source of platinum group metals (PGMs), advised shareholders to expect full-year profits to jump by more than a fifth.

Implats, which has mines in SA and Zimbabwe, said on Thursday that investors should expect headline and basic earnings to be “significantly more than 20% higher” for the year to end-June.

On September 3, Implats will release its full-year results showing the consequences of higher dollar prices for the metals it produces as well as the effects of a weaker rand.

Implats sells its metals in dollars and pays costs mainly in rand.

The standout PGM performances have been in palladium and rhodium, the two metals mainly used to make antipollution devices in petrol engine exhaust systems.

Implats reported headline earnings, a metric that strips out one-off items, of R3.04bn in the 2019 financial year and basic earnings of R1.47bn.

While not giving any range of forecast earnings, Implats said it would update the market closer to the results.

Implats, like many of its mining peers in SA, will reflect the disruptions caused to its mines from the Covid-19 epidemic. SA is the world's largest source of PGMs, which are largely used in industrial applications such as antipollution devices in petrol and diesel engines, as well as jewellery in the case of platinum.

The SA government enforced a hard economic shutdown towards the end of March to curb the spread of the virus and has gradually lifted restrictions. Underground mines were granted permission to return to full production in June.

Implats, which owns 80% of ASX-listed Zimplats, the biggest mining company operating in Zimbabwe, has said mines and processing plants there were uninterrupted by Covid-19, but that flow of concentrate and matte across the border into SA for refining was disrupted.

Implats implemented a temporary force majeure on metal supplies to customers. Companies declare force majeure, a legal clause in all contracts, when events beyond their control disrupt operations and their ability to fulfil contracts, excluding them from penalties.

The Marula mining joint venture with JSE-listed African Rainbow Minerals was temporarily suspended after an outbreak of Covid-19 at the operation.

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