Impala Platinum (Implats) is jostling for the retrenchment of 3 900 employees from its South African operations, citing compressed operating margins despite strong orders for platinum group metals (PGMs), higher refined production and elevated sales for the quarter period to the end of March 2024.
Implats last week announced plans to retrench from Marula, Rustenburg, and from the recently-acquired Bafokeng operation.
This worsened a wave of retrenchments in the industry, with Sibanye-Stillwater also recently announcing the shut down of some shafts.
Implats CEO Nico Muller on Tuesday said the group was still under pressure from low commodity prices.
“Margins remain compressed and we are pursuing a set of actions to ensure that each of our operations is set up to more robustly deliver sustainable free cash flow through the PGMs cycle,” Muller said.
He added it was imperative for each of Implats’ assets to operate “within the appropriate volume, cost and capital parameters relative to the current pricing environment and the broader operating” context.
The South African operating framework has particularly been volatile, with electricity outages, water shortages and ports and rail inefficiencies.
The retrenchments by Implats will affect about 9% of its workforce, a development that has raised the ire of labour unions.
Gideon du Plessis, the secretary general for labour union Solidarity, said Section 189 processes were becoming more common “because of the vulnerability of marginal mines when market conditions” were not favourable such as the current depressed PGMs prices.
However, for Implats, the announcement of the retrenchments from its SA platinum mining operations has coincided with an uptick in its market performance.
Muller said the miner still had strong orders for these commodities.
“Despite continued macroeconomic and geopolitical uncertainty, demand from our contractual customers remains robust, with elevated additional volumes requested via spot sales during the third quarter,” Muller said.
Moreover, refined 6E metal production, including saleable ounces from Impala Canada and Impala Bafokeng, increased by 8% to 717 000 ounces during the quarter to end March.
Sales volumes of the same metals amounted to 824 000 ounces for the same period, an increase of about 10%.
In the nine month period to March, Implats registered a 16% increase in total 6E production volumes to 2.73 million ounces, with a 25% gain in managed volumes to 2.17m ounces as well as a 4% increase in joint venture production to 410 000 ounces.
Muller, however, stressed that “PGM pricing remains lacklustre” amid evident volatility in both platinum and palladium, as depressed investor activity and sentiment exerting influences.
Earlier this year, Implats said that it could halt operations at some of its South African platinum mining shafts if turnaround efforts faltered in the face of plummeting prices of the metal mainly used in auto catalytic convertors, spelling danger for an industry that is also bracing for retrenchments from Anglo American Platinum.
“From 2025 to 2027 we are looking at a reduction of 14% of aspired production both at existing as well as planned increases in production,” the company said at at its results briefing for the half year top the end of December 2023.
During the period under review, Implats attained a 6E milled grade of 3.64 grammes per ton.
Eskom and Zimbabwe electricity outages had an effect on Implats production in the two respective countries during the period under review, although in South Africa the impact was “negligible” amid improvements in supply.
“There were negligible production losses due to load curtailment in South Africa in the quarter, although regional electricity generation and distribution challenges did pose headwinds to operating momentum in Zimbabwe,” Implats said.
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