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Implats to invest R30bn over 5 years, selling Marula, deferring Afplats

Implats CEO Terence Goodlace

Implats CEO Terence Goodlace

Photo by Duane Daws

26th February 2015

By: Martin Creamer

Creamer Media Editor

  

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JOHANNESBURG (miningweekly.com) – With the long-term fundamentals for platinum-group metals (PGMs) remaining strong, platinum-mining major Impala Platinum plans to invest R30-billion across its operations in the next five years, but at a lower level than previously planned in the next two years, when PGMs prices are likely to be lower for longer.

First and foremost in the expenditure of R30-billion was the completion of the key Shaft 16 and Shaft 20 projects in the next three years, Implats CEO Terence Goodlace said at a media roundtable on Tuesday in response to Creamer Media's Mining Weekly Online.

Goodlace said that R6.6-billion of the R30-billion expenditure was earmarked for the Shaft 17 project and the other key project was the base metals refinery in Zimbabwe, for which $100-million was earmarked.

Also in the R30-billion frame was R1-billion a year for ongoing off-reef development, totalling R5-billion.

The ramp-up of the Rustenburg operations after the five-month strike across the platinum belt in Rustenburg in early 2014, and safety stoppages, hurt half-year performance, as did the suspension of operations at Zimplats’ Bimha mine as a result of a major ground collapse, depressed PGM prices and industrial action at Marula, which was now put up for sale.

The company's Afplats project was being deferred for four years; all shaft sinking activities had been stopped and site demobilisation was under way.

On the plus side, pre-strike production rates have been restored at Impala Rustenburg, which is earmarked for repositioning and modernisation, with the new 16 Shaft and 20 Shaft complexes set to deliver 13.5-million tonnes a year and 850 000 oz of platinum a year by 2019.

The company said that Impala Rustenburg was destined for fewer vertical shaft systems, which would be run more efficiently within an improved cost structure.

The ratio of Merensky ore to upper group two ore would be improved, leading to higher grades.

The company would maintain strategic optionality to safeguard the long-term value potential in an environment where metal prices were expected to recover, but that its capital expenditure (capex) target for 2016 was now R4.5-billion, R2.2-billion lower than previously planned.

In a strategic review, which was released with results that saw the R15.9-billion revenues 3.6% lower than in the previous six months to December 31, the company said it would be positioning to conserve cash while restoring and optimising operational performance and profitability.

Capex on the sinking of 17 Shaft would be reduced to achieve a saving of R2.5-billion over 2015 and 2016.

"For the year we're actually in, we'll be saving R1.1-billion and R1.4-billion the next year," said Goodlace, who added that the steps taken would collectively result in improved profitability across the Rustenburg operation.

In Zimbabwe, Zimplats would be restored to a six-million tonnes and 260 000 oz of platinum a year through open pit mining in 2016, while the Bimha mine was being redeveloped.

Steady state production would be maintained at Mimosa and, off the back of the 15% export levy that has been imposed, Implats had shelved the proposed expansion of Mimosa.

Edited by Creamer Media Reporter

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