Company says unit costs to rise
Implats says output to be hit by safety, strike
Output falls on safety closures, strike
November 13, 2009
Impala Platinum said on Friday its total refined output rose 6 percent in the first quarter, despite lower production at its main mine.
Impala Platinum (Implats) said in a statement higher production from its Zimbabwean operations, increased deliveries to its refinery and clearing of stocks during a two-week strike, led to the increase in refined platinum production to 413 000 ounces from 390 000 ounces a year ago.
Implats said platinum output from Rustenburg, its main mining area, fell to 180 000 ounces in the three months to the end of September from 243 000 ounces a year ago.
Implats forecast output from Rustenburg would fall by 100 000 ounces this financial year to 850 000 ounces, due to closures over safety and a two-week strike.
Barend Ritter, a Cape Town-based platinum analyst at Sanlam Investment Management, said the Impala mine (Rustenburg) was struggling, affecting the company's overall performance.
"If they continue at this rate (180 000 ounces a quarter) they won't reach their target of 850 000 ounces," Ritter said.
"They need to make some improvement quarter-on-quarter for them to reach their guidance. I think without any further safety issues or strikes they may just get to their target of 850 000 ounces, but this would still be lower than the mine's normal production of around 1 million ounces."
The company said it would reach this annual output of 1 million ounces within the next five years.
The entire Implats group produced a total of 1.7 million ounces of platinum in its 2009 financial year, but did not give a forecast for the total production in the current year.
Shares in Implats fell 2.19 percent to R167.74 against bigger rival Anglo Platinum, a unit of Anglo American, which fell 0.34 percent.
"Shares fell because some people may have expected better news," Ritter said.
South Africa produces four fifths of the world's platinum and Implats alone supplies 25 percent of the precious metal, mainly from its South African operations and mines in Zimbabwe.
The company said lower production volumes will adversely impact unit costs during the first half of the current year.
Implats said recent improvements in US dollar-based platinum group metal prices had been offset by the rand, which has gained more than 20 percent to the dollar this year.
Platinum traded at $1 357 (R10 096) an ounce from $1 350.50.
South African miners sell their metal in dollars and pay for their costs in rand.
Workers at Implats ended the strike at the company's biggest mine, Rustenburg, on September 7, after failing to win further increases from the company, but their action dented platinum output. - Reuters
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