Implats unveils R8bn investment
June 21, 2007
By Justin Brown
Johannesburg - Impala Platinum (Implats) would spend R8 billion on three new projects as part of R25 billion that the group would be spending up to June 2012, the platinum producer announced yesterday.
Implats' expenditure plus the R30 billion that rival Anglo Platinum (Angloplat) is spending over the three years to 2009 brings to R55 billion the amount the two major producers are spending to expand output and meet growing global demand.
The huge outlay in the platinum sector is at odds with the Chamber of Mines' argument that the new mining law and other regulations, such as water licences and environmental permits, have cost the industry between R5 billion and R10 billion in new investment.
Earlier this year, Gold Fields said that it would spend R4.7 billion to deepen its Driefontein and Kloof mine, while Harmony Gold has spent R1.8 billion so far on four gold projects in South Africa.
Expansion at the Richards Bay coal terminal to increase export capacity, as well as increased domestic demand for coal from Eskom and other industrial users, means billions of rands will be invested in the coal mining sector.
Stephen Roelofse, resources analyst at Sanlam Investment Management, said Implats and Angloplat had a "fantastic growth profile".
Implats had doubled its expenditure for each year from 2008 to 2011 compared with its forecasts in February, when it pegged its capital expenditure at R13 billion during the five years to June 2011.
Almost R15 billion of the R25 billion expenditure will be spent on maintaining Implats' mines. The remaining R10 billion will go to the group's operational costs.
Implats spokesperson Bob Gilmour said the group planned to spend R2.8 billion on the former Leeuwkop project of African Platinum (Afplats). Before its acquisition, Afplats had put its expenditure on the mine at R2.3 billion.
Gilmour said Implats could spend R3 billion expanding the Marula mine in Limpopo.
The remaining R4.2 billion will be spent expanding its Zimbabwe mines, completing the build-up of Marula and the Two Rivers mine as well as expanding platinum group metal processing facilities in South Africa.
The company had already budgeted R1 billion for expanding its processing operations.
Gilmour said the extra funding would be used to raise Implats' output from 1.85 million ounces in the year to June 2006 to 2.5 million ounces by June 2012.
Implats is aiming for 2.3 million ounces of platinum by June 2010.
By 2015, the group was planning to increase its platinum output to 2.8 million ounces, said Gilmour.
The group was expecting the expansion of its Impala lease area near Rustenburg in the North West during the year to June 2006 to lift output to as much as 1.2 million ounces from 1.125 million ounces.
Output at the Marula mine is expected to reach 130 000 ounces of platinum concentrate a year by the end of 2010.
The platinum-bearing Merensky reef could provide extra expansion potential at Marula.
The group said it had secured resources at Zimplats in Zimbabwe to expand up to 1 million ounces of platinum production and maintain that output for 50 years.
Zimplats produced 90 300 ounces of platinum during the year to June last year.
At the Mimosa mine, also in Zimbabwe, output is expanding to 95 000 ounces of platinum from 72 200 ounces in the year to last June.
Implats has a 50 percent stake in Mimosa, while Aquarius Platinum owns the other half of the mine.
The accessing of the North Hill block at Mimosa could result in the doubling of output at the operation, said the company.
Yesterday investors warmed to Implats' planned expenditure.
Its shares gained 2.60 percent to R246.37 on the JSE.
The platinum and precious minerals sector added 1.6 percent.
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