Impala Platinum CEO Nico Muller says the platinum group metals market fundamentals are stronger than what current pricing suggests.Reflecting on the company’s results for the financial year ended June 30, Muller says the company had anticipated a fall in PGM prices, “admittedly it happened much faster than originally expected”.
The group posted a 32% year-on-year decline in Ebitda to R36-billion for the financial year under review. Tonnes milled from the group’s managed operations increased by 7% year-on-year to 23.8-million tonnes, with higher reported volumes at Impala Rustenburg, Zimplats and Impala Canada, together with a consolidated contribution of 403 000 t from its newly acquired Royal Bafokeng Platinum subsidiary, which all offset lower throughput at Marula.
Muller says the financial year was challenging amid widespread power shortages, softening prices, rand depreciation and persistent inflation. Implats’ stay-in-business spend of R7.3-billion, replacement capital of R2.3-billion and expansion capital of R1.9-billion increased by 16%, 61% and 41%, respectively, in the year under review, compared with the prior year.
Muller says developing negative cash flows is not palatable to Implats, referring to the group’s Canadian operations; however, he adds that production from the region increased by 17% in the year under review and that the Canadian operation is not the highest risk asset in the portfolio. Moreover, group production in the 2024 financial year will be supported by volume gains from increasing milling capacity at Zimplats and Two Rivers, while the improved operational stability established at Impala Rustenburg and Impala Canada will bode well for further efficiency gains.Implats expects 6E refined production to be between 3.3-million and 3.45-million ounces for the 2024 financial year.
Forecasts for secondary flows continue to be downgraded as scrap collections fall short of expectations in the face of rising interest rates, increased regulatory scrutiny and still-weak new-vehicle sales.