THE COMPETITION Commission has given the green light for the acquisition of a controlling stake in Royal Bafokeng Platinum by Impala Platinum (Implats), which on Friday reported broad production declines from managed and joint venture operations for the quarter period to the end of March.
Implats, the world’s second-largest producer of the precious metal, recorded a 3% decrease in total 6E concentrate volumes to 2.38 million ounces, worsened by a 4% lowering in volumes to 1.7 million ounces from managed operations.
Volumes from joint ventures also declined 3% to 407 000 ounces, although there was a marginal increase of 1% from third-party production.
Resultantly, refined production for its six elements was 6% lower at 2.35 million ounces. The company has attributed this to “the timing and extent of processing” maintenance.
Implats CEO Nico Muller said the “operating landscape continues to be challenging”, worsened by inflation, skewed supply chains and a difficult labour market.
“Escalating geopolitical conflict, rampant inflation, constrained supply chains and a tight labour market have compounded the production impact of extended safety stoppages and the operating protocols required to manage Covid-19,” he said.
With the group continuing to experience strong demand for its metals, it is now focusing on “embedding operational stability in a period where the risk of unplanned interruptions” has increased.
“Implats generated meaningful free cash flow during the period, and our balance sheet remains strong and flexible.”
The company received a boost on Friday when the South African Competition Commission recommended that the South African Competition Tribunal approve Implats’ proposed acquisition of control over Royal Bafokeng Platinum (RBPlat).
The transaction was, however, “subject to certain conditions relating to public interest considerations which have largely been agreed upon” by Implats and the commission.
“This is an important milestone in the proposed transaction. Throughout this process, we have worked closely and transparently with our key partners in government, labour and our communities,” said Muller.
RBPlat said in April that it had “approximately R3 billion of debt facilities available” after factoring in a net cash position of R5.5 billion, which powered up payment of the 2021 final dividend of approximately R1.5 billion.
In Canada, the group’s operations faced “challenges associated with global supply chain constraints and labour” availability. This had resulted in hauling constraints and increased downtime at its processing plant, which impacted on recoveries.
Milled volumes from the Canada operation decreased by 4% to 886 000 tonnes, while milled head grade rose by 3% to 2.80g/t 6E.
For the nine-month period to March, constraints on equipment availability due to tight labour conditions and a shortage of critical parts and spares “created a complex and testing operating environment” for the company.
Rolling power cuts in Zimbabwe impacted milling operations from the Mimosa mine jointly owned with Sibanye-Stillwater. A planned plant shutdown, together with elevated water impurities, impeded process recoveries.
“Ongoing work to improve plant performance yielded recovery benefits towards period end. Milled volumes of 678 000 tonnes declined by 2% and the marginal decrease in milled head grade to 3.84g/t 6E was compounded by lower recoveries, resulting in a 6% decrease in 6E production in concentrate to 60 000 ounces.”
BUSINESS REPORT ONLINE