The world’s second-largest platinum miner, is cutting its future production to 520,000oz of platinum and slashing the number of its mines to six from 11, with 13,000 jobs to go within two years.
On Thursday, August 1, Impala Platinum announced a major restructuring, shaft closures and job cuts to cope with a high-cost environment, and, in the platinum sector, a largely stagnant price for its primary metal, platinum.
The restructuring will cost R2.7bn during 2019 and 2020‚ and will be funded from internal cash resources as well as selling inventories.
Implats CEO, Nico Muller, said: “The only option for conventional producers today is to fundamentally restructure loss‐making operations to address cash‐burn and create lower‐cost, profitable businesses that are able to sustain operations and employment in a lower metal price environment.”
“While employee rationalisation is inevitable in a restructuring process of this nature, due care will be taken to ensure that job losses are minimised as far as possible through a range of job loss avoidance measures. This major transformation will be phased over a two year period to ensure that we are able to mitigate the various implementation risks and socio‐economic impacts,” he added.
Imapala has had a record of negative cash flows in recent years, and the capital investment to develop 16 and 20 Shafts, have been funded from cash flows from other Group operations as well as external sources, including an equity raise and convertible bond issue totalling more than R10 billion. The Group’s cash position at the end of the 2018 financial year has been further eroded by ongoing losses and the impact of a once‐off pipeline stock build‐up this year.
“Our recent strategic change initiatives, together with the implementation of the Impala Rustenburg transformation, positions the Group’s portfolio exceptionally well for future profitability, even at current metal prices. It will significantly improve the position of the Group to sustainably deliver improved returns to all stakeholders in the medium to long term,” Mulder concluded.