JOHANNESBURG (miningweekly.com) – Platinum mining company Implats, which reported an impairment-impacted 137c a share headline loss in the 12 months to June 30, sees the lower-for-even-longer metal price environment as 'the new normal'.

In presenting results for its financial year to June 30, the JSE-listed company reported disappointing production at the Impala Rustenburg and Marula mines, which were both below target.

While Impala Rustenburg produced 654 600 oz of platinum for the financial year, its R2.68-billion after-tax headline loss was largely a result of sustained low rand basket prices, a cost base that is structured for a higher level of production and persistently low operational efficiencies.

“It’s clear that we cannot accept it being business as usual for Impala. A comprehensive strategic review of this operation is planned to ensure that it will operate at a cash neutral level in what is perceived to be the new normal pricing environment,” the company, headed by CEO Nico Muller, said in a SENS announcement.

The review will be focused on returning the mine to profitability by prioritising profitability and value, over volume.  Similarly, Marula made a headline loss after-tax of R737-million, which was largely the result of disruptions to its operations by surrounding communities.

A comprehensive stakeholder engagement process has been initiated to mitigate against further disruptions and, in addition, the mine undertook a Section 189 retrenchment process to restructure its cost base.

The target for Marula to be cash positive at group level in 2018 has been set, and will be strictly monitored each quarter throughout the coming year.

With the exception of Rustenburg and Marula, all other operations performed at or above expectation, supplemented by a 35% increase in tolling throughput at Impala Refinery Services.

Revenue, assisted by a marginally improved rand basket, rose to R36.8-billion from R35.9-billion and gross refined platinum production increased by 6.4% to 1.53-million ounces.

Capital expenditure of R3.43-billion was maintained at similar levels to the previous year, with R1.14-billion being spent on the two development shafts, Shaft 16 and Shaft 20,
at Impala Rustenburg. In other areas, additional capital was deferred as a response to the ongoing low-price environment.