HomeNewsImpala remains cash negative till 2011

Impala remains cash negative till 2011

David Brown, CEO,
Impala Platinum
Johannesburg, South Africa — MININGREVIEW.COM — 15 September 2009 – Impala Platinum “’ the world’s second largest platinum producer “’ will be cash negative after capital expenditure for two years, assuming the current rand/dollar exchange rate and metal prices.

“The next two years we will burn cash,” said Implats CEO David Brown in an interview with Miningmx.com. “But we have R3.5billion in undrawn facilities,” he added.

In its annual results in the year ended June, Impala said it had net cash of R1.36 billion. This compares to R8.8 billion in cash at the same time in the corresponding financial year.

Impala had suspended the development of its Leeuwkop mine which it bought from African Platinum in 2007, and the expansion of Marula – projects expected to consume R10 billion in cash over five years.

But Brown confirmed that Impala Platinum had completed the phase one US$340 million (R2.7 billion) expansion of Zimplats. “We took a conscious decision on near-dated ounces and we continued with it,” said Brown. The Zimplats project will be cash positive during 2011.

The group was also unlikely to reach this year’s 1.8 million ounces production target after its recent two week strike and safety related changes made to the No 14 shaft at Rustenburg mine, had sliced 100 000 oz off output. “We will be closer to 1.7 million ounces. We will attempt to make up some of the production through extra shifts, but that has its limitations.”

Brown raised concerns over labour relations, saying the National Union of Mineworkers (NUM) had shown “more militancy” than before. “The sporadic violence suggests a greater confidence that the work force can get its own way,” he said.

Brown also felt power shortages would return when the South African economy revived. “Eskom has missed a window of opportunity to either introduce independent power or manage demand. The only progress has been to increase tariffs. The economy will recover and we could be in crisis again by the winter of 2010,” said Brown.