JOHANNESBURG - Impala Platinum (Implats) has slashed both the production and capital expenditure guidance by 15 percent and withdrawn its unit costs guidance for the 2020 financial year due to unprecedented uncertainty caused by the Covid-19 pandemic.
Chief executive Nico Muller said today that the group was well on track to meet the guidance parameters on production unit costs, and capex.
“However, Implats is now faced with a period of unprecedented uncertainty due to the Covid-19 pandemic and the implementation of nationwide lockdowns and legislated limitations on production capacity at the group’s South African operations,” Muller said.
The JSE listed platinum group metals producer (PGM) which operates mines in South Africa, Zimbabwe and Canada reduced its refined PGM (6E) production to between 2.6 million ounces and 2.9 million ounce for the 2020 financial year. The company previously said 2020 refined PGM (6E) would be between 3 million ounces and 3.4million ounces.
"Implats' revised production guidance considers the production losses suffered in March and April 2020 and assumes average production rates of between 30 percent and 40 percent in May and June 2020 for South African operations,"Muller said.
Capex has been slashed to between R3.6 billion and R4.4 billion, from a previous guidance of between R4.9 bn and R5.2 bn.
Muller said that capex spend was impacted by the wider effects of the South African national lockdown, together with rand weakness on spending in Zimbabwe and Canada.
“The revised capex guidance reflects rand weakness, offset by savings and deferment where necessary,”Muller said.
The unit cost guidance of R13 500 a 6E ounce was also withdrawn.
The implementation of the lockdown had resulted in a loss of 6 percent milled tonnage from each of the Impala, Marula and Two Rivers mines, equivalent to approximately 26 000 ounces of 6E mine-to-market concentrate production during the quarter, Muller also said.