Tharisa
PGM generic

Tharisa CEO Phoevos Pouroulis says: “A solid operational performance from mining and processing lead to a stable quarter despite the adverse impact of weather, and the well-publicised Eskom power shortages,”

“Whilst Tharisa benefits from our overall low usage and stand-by capacity, the unprecedented moves to “Stage 6” load-shedding and consequent power reductions, did provide disruption to the processing plants’ stability.

“Overall, plant performance was commendable.

“Mining, accounting for the weather-related impact, was in line with expectations and we should see a build up towards the latter half of the year.

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“Our co-product model remains robust as record PGM prices were received. However, we remain concerned about the prevailing low chrome and ferrochrome prices, which has had a negative effect on the chrome industry.

“Our progress in Zimbabwe is continuing as planned.”

Safety

Safety is a core value and Tharisa continues to strive for zero harm at its operations. A LTIFR of 0.21 per 200 000 man hours worked was recorded at the end of the quarter.

Mining

Reef tonnes mined totalled 1 143.0 kt, which when compared to the previous comparable quarter in December 2018 was up 4.8% but lower than the previous quarter ended September 2019, as inclement weather impacted the open pit operation, resulting in a ROM ‘opportunity loss ‘ of over 230 kt.

Rainfall during December was 137% higher than the previously recorded highest rainfall in the five prior years.

The lower reef tonnage had a direct impact on reef milled but was up when compared to December 2018 at 1 247.1 kt.

The stripping ratio improved against all measurements at 10.9 m3.

Processing

Stand by power generating capacity mitigated the impact of Eskom load-shedding on the processing plants although the increase to “Stage 6” and the resultant electricity curtailment did result in an overall reduction in tonnes milled of 11.2 kt which had a further impact on overall chrome production.

PGM production was 34.4 koz (6E basis) from a rougher feed grade of 1.41 g/t and recoveries at 82.2%.

Chrome concentrate production was 342.5 kt, comprising 261.0 kt of metallurgical grade and 81.5 kt of specialty grade.

Third party chrome production was 62.3 kt, as the K3 plant was closed during December.

Market update

Our co-product business model has benefitted from record PGM prices, with the average PGM contained metal basket price for the quarter at US$1 406/oz (ZAR20 745/oz), with palladium and rhodium continuing to be the main driver of the increased basket price.

The average chrome price received for the quarter was US$145/t with current spot trading at US$133/t, levels the company believes are unsustainable in the long-term, but expectations are for chrome concentrate prices to remain at these levels during the current quarter, with some potential for improvement into the third quarter.

Outlook

Tharisa’s FY2020 production guidance remains at 155 koz to 165 koz PGMs (6E basis) and 1.45 Mt to 1.55 Mt of chrome concentrates.

The co-product model remains robust and we continue to enjoy the benefits of record PGM basket prices as we ramp up production in both PGM and chrome concentrates.