adminJohannesburg. — Impala Platinum Holdings Ltd is reviewing mines and capital commitments after a five-month strike at its largest South African mine even as the second-biggest producer has no plan to reduce output or cut jobs.
The company will consider delaying capital spending and using new technology to raise productivity after it lost 312 000 platinum ounces in output due to the stoppage at its Rustenburg operation, the world’s largest mine for the metal, Chief Executive Officer Terence Goodlace told reporters in Johannesburg today.
The stock fell to the lowest in 13 months.
A walkout by more than 70 000 miners at the South African operations of Impala, Lonmin Plc and Anglo American Platinum Ltd cost the companies about 24 billion rand ($2,3 billion) of stalled output during the stoppage that ended June 24.
Amplats, as the largest producer is known, is seeking buyers for four mines and Lonmin warned of possible job cuts as it relooks operations in the wake of the strike.
The review will “factor in the effect of the strike on the time horizons of the capital projects,” Goodlace said.
“We are building this mine. We don’t need less labour, we need more.”
Impala is targeting annual production of 850 000 ounces at Rustenburg, Goodlace said.
Output at the mine plunged 42 percent to 411 000 ounces in the year through June, he said.
Rustenburg Ramp-Up
South Africa accounts for more than two-thirds of the world’s mined platinum production.
Impala shares fell 6,5 percent, the biggest intra-day drop since January 27, to 95,71 rand by midday in Johannesburg, the lowest since Aug. 7, 2013.
The Rustenburg operation has ramped up to about 65 percent of pre-strike production levels and will probably reach full capacity within two months, Goodlace said. Output won’t exceed 575 000 platinum ounces in the 2015 fiscal year.
“We’ve got to position the mine for 2016 where we’ll get a more normalised cost basis,” he said.
“The costs in 2015 are not going to be pretty.”
The company, which also has mines elsewhere in South Africa and Zimbabwe, met all sales obligations until April, and decreased this to about 50 percent to 60 percent in the two following months, Sifiso Sibiya, head of marketing, told reporters. Impala will ship 80 percent of orders in September and 100 percent in October, he said.
Annual earnings excluding one-time items declined 74 percent to 0,86 rand from year earlier because of the strike and lower prices, Impala said in a statement. The average of 18 estimates in a Bloomberg survey was for 0,87 rand.
Output Drop
Refined platinum output fell to 1,18 million ounces from 1,58 million ounces, it said. Impala suspended its final dividend after waiving an interim payout in February for the first time since at least 1990, according to data compiled by Bloomberg.
Unit costs per platinum ounce rose 18 percent to 19,430 rand, Impala said.
The average spot price for the metal was $1,431.60 an ounce in the fiscal year, down 7.6 percent from the previous year.
“Demand growth, particularly in jewellery and investment, has outpaced supply,” the company said.
“Despite this, abundant above-ground stocks have constrained any upward price movement.” — Bloomberg.
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