Implats loss narrows as it cuts 1 400 jobs at biggest mine

Nairobi - Impala Platinum [JSE:IMP] cut 1 400 jobs at its Rustenburg operations, narrowed its loss and closed shafts as the producer of platinum-group metals seeks further cost reductions to boost cash flow by as much as R1bn in the next two years.

Implats is looking to "refocus or close unprofitable areas" and revise costs structures to return to profit in an environment of low prices for platinum-group metals, the Johannesburg-based company said in a statement on Thursday.

The headline loss, which excludes one-time items, narrowed to R150m in the six months ended December 31 from R508m a year earlier.

Prices of platinum, used to make catalytic converters in diesel vehicles that curb harmful emissions, have halved from a record reached in 2011. South African producers are grappling with a stronger local currency, which has gained 10% against the dollar since June, pushing up costs.

Impala halted operations at four shafts at its Rustenburg mine in January and is optimising operations at three others. It wants to operate lower-cost, shallower and mechanised assets and the Rustenburg operation may be profitable in a low-price environment, it said.

“The challenges and uncertainties confronting the South African PGM industry remain significant,” Impala said.

“The market fundamentals for platinum are only expected to strengthen materially from 2020 onwards, with the introduction of stricter heavy-duty diesel emission regulations, and with supply from South Africa starting to taper off.”

While the market outlook for platinum remains muted, demand for palladium and rhodium remains “robust,” supported by growing automotive gasoline demand. Impala estimates full-year refined production at 1.5 million platinum ounces.

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