JOHANNESBURG (miningweekly.com) – South Africa’s second-biggest platinum mining company Impala Platinum (Implats) said on Thursday that it would no longer be supportive of lossmaking operations and was taking strong steps to bring about a cash neutral position at its major productivity-hit Impala Rustenburg platinum mine and would close the community distrupted Marula mine if it failed to become cash positive.

Impala Rustenburg, which produced 654 600 oz of platinum in the 12 months to June 30, incurred a headline after-tax loss of R2.68-billion in the period, with disruptions, mainly by surrounding communities, putting Marula R737-million in the red.

“We’re the second largest platinum producer and de facto that imposes on us a leadership responsibility. We take that seriously. That’s why we are very explicit at this stage that we’ll not support ongoing lossmaking operations,” new Implats CEO Nico Muller told a media roundtable in which Creamer Media’s Mining Weekly Online participated.

Muller disclosed that the Johannesburg Stock Exchange-listed company, which saw its headline earnings a share plunge from a 12c a share profit in the corresponding period of last year to a 137c a share loss in the 12 months to June 30, was in the first phase of the review of an intended restructuring of particularly Rustenburg and Marula.

“We’re looking at regrouping the various assets into different categories and remoulding the finances,” Muller told Mining Weekly Online.

The tackling of the highest-cost producing shafts has already commenced as part of a likely multi-phased restructuring process over the next two years.

Muller does not envisage the restructuring as being a one-off big bang.

The complexity at Impala Rustenburg lies in the low level of differentiation between the operating parts of the various shafts, a factor that has impeded strategic decision-making over the last number of years.

At Marula, the target is to be cash positive at group level in 2018, with strict monitoring each quarter of the current financial year.

At Impala Rustenburg, old shafts are in the process of closing, mature shafts are carrying the brunt of the load and new shafts are still absorbing capital in their ramp-up. 

The old shafts are being targeted for optimum money making, the mature shafts are being targeted for optimum productivity per person and new shafts are being targeted for optimum rates of development into huge new unmined areas.

“We’re doing a lot to accelerate our development rates. There’s a fairly steep curve to climb but that’s where the focus is, to get up that curve,” said Implats COO Gerhard Potgieter about 16 Shaft and 20 Shaft, the two new shafts, which are being conventionally mined but with beneficial modcons, including top-notch control rooms and in the case of 20 Shaft, trackless access to the rockface.

“That’s the modern way of doing narrow reef mining and we believe we’re getting it right,” Potgieter added in response to Mining Weekly Online.

Implats is strategising on the low metal price environment being 'the new normal'.

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.