PUSHING AHEAD Impala Platinum has realised continued improvements during the 2020 financial year to deliver production ramp-up
Business unusual’ is expected to characterise much of the 2021 financial year, owing to the Covid-19 outbreak, says platinum group metals producer Impala Platinum (Implats).
The company expects to face increasing challenges in terms of its medical preparedness and operational resilience, especially as infection rates in South Africa are forecast to peak during August and September.
“Implats has taken several proactive steps to safeguard its business and is focused on securing and ensuring the wellbeing of our employees,” says Implats corporate affairs executive Johan Theron.
The impact of Covid-19 on the group’s operations have varied according to their geographical location.
In South Africa, where Implats operates the Impala, Marula and Two Rivers mines, production was significantly impacted on in April and May, with almost no production taking place in April. Production was restored to about 85% capacity by mid-June.
Mining was declared an essential service during the lockdown in Zimbabwe, where Implats owns 87% of Zimplats and 50% of Mimosa, and it has experienced minimal impact on production to date.
Mining was also declared an essential service in Canada, but palladium producer Impala Canada recorded a six-week stoppage at the Lac des Iles mine, north-west of Thunder Bay, in Ontario, following an outbreak at the remote mining site.
“Fortunately, we were permitted to operate our smelters and refineries during the hard lockdown in South Africa, which enabled us to process some excess in-process inventory while our mines were affected,” notes Theron.
He h
ighlights that the impact of Covid-19 has narrowed the expected deficit for palladium while deepening expectations of rhodium shortages this year.
To date, supply disruptions have closely matched much weaker global demand, specifically from the automotive sector, which has been severely impacted on and is still the company’s biggest customer base by a comprehensive margin.
“Consequently, metal prices have remained relatively strong; however, the markets are not functioning normally. Ultimately, price direction depends on the global economy’s ability to overcome the effects of the virus and return to growth,” says Theron.
Nonetheless, Implats still expects tight markets for palladium and rhodium, with strong price support in the long term, while its outlook for platinum remains more mooted.
However, the medium-term prospects for the platinum market are underpinned by developments involving the substitution of palladium with platinum in “gasoline cars”and the welcome inclusion of hydrogen fuel in the economic recovery plans of many nations.
Weathering the Storm
The experience gained by Implats’ team over the past few months, together with the geographical diversification of its operational footprint and the strong financial position of the group, will prove vital in successfully navigating the expected variability in the near-term operating environment, highlights Theron.
“The safety of employees and contractors on all sites remains a key priority, and additional measures are in place to protect the health of employees,” he says.
Despite the economic disruption of Covid-19, Implats’ key projects in Southern Africa forge ahead.
Focused on low-cost, predominantly mechanised assets, these projects aim to deliver defensive cash generation to entrench the group’s competitive position and sustain its profitability into the future.
The Impala Rustenburg 16 Shaft project remains on track for completion in the second half of 2022, when steady-state production of 330 000 oz/y is expected.
Continued improvements have been realised during the 2020 financial year to deliver production ramp-up.
The Impala Rustenburg 20 Shaft is also a growth shaft, which extends the life-of-mine of the Rustenburg lease area.
In Zimbabwe, the Mupani mine decline development remains ahead of schedule.
“The project is expected to be completed by July 2024, with steady-state production achieved by 2029.”
Meanwhile, Implats’ skills development and social investment and development initiatives have continued throughout the pandemic, apart from interruptions caused by the hard lockdown, with support for host communities increased owing to the outbreak.