File image: Impala Platinum underground operations in Rustenburg.(Photo Supplied).
CAPE TOWN - Impala Platinum (Implats), the world’s second-largest platinum producer, lowered its 2018 production target to 1.5 million ounces from a previous estimate of 1.46 million ounces as furnace maintenance and an electrical failure at its Rustenburg mines hampered smelting.

Impala chief executive Nico Muller cut the target, saying in the March quarter production report released last week that “furnace challenges experienced during the period will, unfortunately, inhibit all the platinum produced in concentrate during the period from being fully refined before the financial year-end”.

Implats, which is valued at R16.8 billion, commissioned a clean-up and repairs at the No 5 furnace transformers in the Rustenburg mines following a fire in early February. To add insult to injury, the furnace also experienced an electrical fault, also in February.

The furnace problems resulted in a 56% dive in refined platinum production to 71000 ounces in the March quarter from 160000 ounces in the prior period owing to the build-up in pipeline stocks.

Rustenburg’s refined platinum production for the nine months ended March also declined by 29% to 342000 ounces from 479000 ounces in the prior corresponding period, the company said.

The three transformers at the No 5 furnace were replaced in March. The furnace was safely recommissioned this month and was expected to be in full production in May, Impala said, adding that there would be a backlog.

“Some 100000 platinum ounces of pipeline stocks accumulated before the April 2018 recommissioning will not be refined within the current financial year,” the company said.

Implats, which also produces platinum from Zimplats in Zimbabwe, said overall refined platinum production in the March quarter dropped by 5% to 316000 ounces, compared to 331000 ounces in the prior period. In the nine months ended March, the group’s refined platinum production declined by 6% to 1.04million ounces, compared to 1.1million ounces during the prior corresponding period.

Despite problems at Rustenburg, full-year production guidance was maintained at Zimplats, Marula, Mimosa and Two Rivers.

Muller said the company had experienced less community unrest at Marula, its Mpumalanga-based operation.

“The period under review saw a notable decline in community disruptions compared to the prior comparable period, which was significantly impacted by protest action,” Muller said.

As a result, tons milled during the quarter almost doubled, compared to the previous corresponding period, increasing to 441000 tons from 221000 tons.

The company previously said production was disrupted by the protests that stemmed from unhappiness with the way in which the community’s 50% interest in the Makgomo Chrome project was being handled by their representatives.

At Zimplats, tons milled increased by 6% during the March quarter to 1.65 million tons, compared to 1.56 million tons in the prior corresponding period.

Meanwhile, tons milled at Mimosa mine in Zimbabwe during the period improved by 1% to 675000 tons.

- BUSINESS REPORT ONLINE