JOHANNESBURG (miningweekly.com) – Amid an operating environment constrained by macroeconomic headwinds and low prices for platinum group metals (PGMs), Implats delivered guided production volume and cost control in the 12 months to June 30.

PGM pricing was impacted by industrial destocking and an uncertain geopolitical landscape. (Also watch attached Creamer Media video.)

Lower palladium and rhodium pricing negated higher sales volumes, compressing operating margins and free cash flow.

Group six element (6E) production increased 13% to 3.65-million ounces and saleable 6E refined production rose 14% to 3.38-million ounces.

Sixteen-percent-higher 6E sales volumes totalled 3.44-million ounces but dollar revenue per 6E ounce fell 34% to $1 350 on materially lower rhodium and palladium pricing. Rand revenue per 6E ounce was down 30% at R25 257 per 6E ounce.

The 14% margin earnings before interest, taxes, depreciation and amortisation were R12.4-billion compared with the 34%-margined R36-billion of the corresponding 12 months in 2023.

Headline earnings of R2.4-billion were 87% lower and basic earnings declined to a loss of R17.3-billion.

Financial metrics were impacted by impairments resulting from lower PGM pricing, once-off charges arising from the conclusion of the Royal Bafokeng Platinum transaction, as well as the labour restructuring initiated during the period.

The labour-restructured Implats has been set up to deliver free cash flow in financial year 2025 (FY25), when the Johannesburg Stock Exchange-listed company will be able to draw down previously accumulated inventory and release cash to the group.

PGM markets are likely to remain in fundamental deficits in 2024 when automotive production growth is expected to moderate, industrial demand is expected to be marginally lower as capacity expansions ease, and supply is expected to stage a modest recovery on improved autocatalyst scrap collections.

However, the pricing impact of continued industrial and automotive original equipment manufacturer destocking will continue to influence physical market tightness and pricing over the remainder of the calendar year, as will the trajectory of monetary policy and interest rates in major developed economies.

“Implats has benefitted from past investment into our people and assets, which underpinned the strong operational delivery at our key mining and processing assets during the year and provided the flexibility to take measured action in response to soft metal pricing,” Implats CEO Nico Muller stated in a release to Mining Weekly.

“Key strategic projects at our mining and processing operations were successfully advanced and the construction of our flagship renewable-energy project — the largest solar power plant in Zimbabwe — was completed.

“Together with the water security and community investment initiatives progressed, we continued to demonstrate our commitment to environmental stewardship and long-term sustainability,” Muller added.

The journey to zero harm suffered a significant setback, with the groups’ safety performance dominated by the devastating 11 Shaft tragedy at Impala Rustenburg in the first half of the year.

The 50-year-old, 70 000-employee Implats’ eight operations are in the Bushveld Complex in South Africa, the Great Dyke in Zimbabwe and the Canadian Shield in North America.

GUIDANCE

Group production in FY25 will be supported by operating momentum at Impala Rustenburg, Zimplats and Mimosa.

Performance at Two Rivers is expected to stabilise as the Merensky project is placed on care and maintenance and upper group two production is prioritised.

Production at Styldrift will be consolidated at a lower labour complement, while third-party receipts reflect expected volumes from pre-existing contracts.

Refined volumes will benefit from the partial release of previously accumulated excess inventory and 6E refined and saleable production is expected to be between 3.45-million and 3.65-million ounces.

Group unit costs are forecast to rise by up to 5% to be between R21 000 and R22 000/6E ounce.

Group capital expenditure is forecast to be between R8-billion and R9-billion, inclusive of growth capital of between R0.9-billion and R1.1-billion.