Johannesburg, South Africa — MININGREVIEW.COM — 14 February, 2008 – Impala Platinum Holdings Limited (Implats) – second biggest platinum producer in the world – delivered an excellent operational performance in the last half-year with more than 10.5 million tonnes milled, overall refined platinum production up to a record 1.03 million ounces, and record half-year earnings of R4.7 billion.
Presiding here today over the company’s official presentation of its results for the six months to December 31, 2007, CEO David Brown said this production was on the back of improved results from Impala Rustenburg and on-going ramp-ups at other Implats operations.
The presentation revealed that results for the half year were once again underpinned by the strength of the market for platinum group metals. Revenues per platinum ounce were up 12% in rand terms and 17% in dollar terms compared to the first half of the previous year, resulting in a 10% increase to total sales revenue of R16.3 billion.
Group unit costs were well contained to an increase of 12.7% to R6 340 per platinum ounce (excluding share based payments) on the back of volume growth from Impala Platinum. Cost of sales amounted to just under R8.7 billion, leaving a gross profit of R7.6 billion for the six-month period.
Capital expenditure for the half-year was R2.4 billion – more than 75% above the R1.36 billion in the same period of the previous year. “Impala Platinum made up for almost two-thirds of this amount with expenditure of more than R1.5 billion on development of the mine’s 16 and 20 shafts,” Brown revealed, “and a feasibility study for 17 shaft has been completed and approved by the board. This project is expected to cost R5.5 billion, and group capital expenditure over the first six months of 2008 is expected to amount to about R2 billion,” he estimated.
“Safety is still of paramount importance to the group,” Brown emphasised, “and despite the lost time injury frequency rate (LTIFR) having improved by 13% over the year ended 30 June 2007, there were regrettably eight fatal incidents throughout the group. There is a need to drive continuous improvement in this area and we welcome the initiatives by government to ensure safer work environments,” he added.
Referring to the power situation, Brown pointed out that Implats had already lost 10 000 oz of production. “With Eskom supplying 90% at the moment the situation is sustainable in the short term,,” he added, “but we could lose another 10 000 oz in the first half of 2008, making a total of 20 000 oz in the 2008 financial year.”
Looking ahead, Brown predicts that South African supply constraints due to power and people issues, coupled with stable to firm automotive demand, will result in very tight market conditions in 2008 for platinum and rhodium. “While the outlook for palladium continues to improve, significant above-ground stock sales have the potential to be price disruptive,” he concluded.