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Job losses loom at troubled Marula – Implats

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Job losses loom at troubled Marula – Implats

Acting Implats CEO Gerhard Potgieter
Photo by Duane Daws
Acting Implats CEO Gerhard Potgieter

26th April 2017

By: Martin Creamer
Creamer Media Editor

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JOHANNESBURG (miningweekly.com) – Despite ongoing engagement between all stakeholders to restore operational continuity and secure the financial sustainability of the Marula platinum operation, continued community protest action and persistently low metal prices have now necessitated a fundamental restructuring of the business to secure the financial viability of the operation in the current tough operating environment.

“Regrettably, the ongoing community disruptions and low metal prices have resulted in a further restructuring process at Marula,” acting Implats CEO Gerhard Potgieter said on Wednesday, when the JSE-listed platinum-mining company released its third-quarter production results for the three months to March 31.

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New CEO Nico Muller assumed office on April 3.

Marula has given notice to the regulator and representative trade union in terms of Section 189A of the Labour Relations Act of its intention to restructure the operation in a way that may impact more than 1 000 job opportunities.

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The formal engagement process, which began on March 28, would likely be concluded before the end of June.

Marula, on the eastern limb of the platinum-rich Bushveld Complex, is the smallest operation of Implats, which produces a quarter of the world's supply of primary platinum from mainly Impala Platinum, in Rustenburg, which is situated on the Bushveld Complex’s western limb.

The group, which has five main operations, produced 6.2% fewer refined platinum ounces from January 1 to March 31, at 331 000 oz, ascribing the decline largely to material at its Zimplats operation in neighbouring Zimbabwe being released from processing inventory in the comparable three months of 2016.

“In addition, community disruptions were experienced at Marula and Two Rivers during the current quarter, which affected production,” the company added in a release to Creamer Media’s Mining Weekly Online.

However, over the nine months to March 31, gross refined platinum production increased by 6.2% to 1.11-million platinum ounces, mainly on higher third-party receipts by Impala Refining Services (IRS), which refines metal for nongroup companies.

SEVEN FATALITIES

In the three months to end March, two fatalities at Impala Rustenburg and one at Marula brought the total number of fatalities for the 2017 financial year to seven.

“Despite the regrettable loss of life, management remains resolute to ensure every workplace is free from serious and fatal incidents,” the company said.

OUTLOOK

Implats’ full year production guidance is maintained at 1.5-million refined platinum ounces, at a unit cost of R22 600/oz, up on the previously guided R22 200/oz, owing to lower than expected production from Marula and the costs associated with the Section 189A process under way at the operation.

Added to this is the weaker projected rand/dollar exchange rate, which will influence rand unit costs at Zimplats in Zimbabwe.

IMPALA RUSTENBURG

Refined platinum production at Impala Rustenburg in the three months to the end of March increased by 12.7% to 160 000 oz on 2.15-million tonnes milled - an increase of 4.5%.

However, tonnes milled over the nine-month period ended March 31 fell by 9.5% to 7.20-million tonnes, on the temporary closure of the 14 Shaft decline section to effect repairs after the January 2016 fire.

MARULA MAELSTROM

The protest action at the Marula platinum mine, according to Implats, is directly related to certain community members being dissatisfied with the way in which the community’s 50% interest in the Makgomo Chrome project is being managed by their representatives. Also impacting production is the closure of the hybrid mining section at the Clapham shaft, resulting in tonnes milled in the quarter nearly halving to 221 000 t. Platinum-in-concentrate for the quarter consequently fell by 47% to 9 000 oz, compared with 17 000 oz in same quarter last year.

Over nine months, tonnes milled was 11.4% down at 1.13 million tonnes, and concentrate 11.9% down at 52 000 oz.

TWO RIVERS MINE

Tonnes milled at Two Rivers fell by 5.9% in the quarter to 868 000 t owing to community protest action in the area, unrelated to the mine, which prevented employees from reporting for duty.

Platinum-in-concentrate production for the period consequently declined by 12.2% to 43 000 oz.

However, over nine months, platinum-in-concentrate production remained largely unchanged at 140 000 oz.

IMPALA REFINING SERVICES

Platinum refined by IRS in the quarter was 18.6% lower at 171 000 oz owing to lower receipts from the Zimplats, Marula and Two Rivers mines.

However, over the nine months to the end of March, output was 9.4% higher, at 631 000 oz, on higher third-party supply.

ZIMPLATS

Milling fell 4.8% to 1.57-million tonnes at Zimplats, where platinum production in matte was 25.8% lower at 66 000 oz. However, over nine months, 2.2% more tonnes were milled at 4.87-million tonnes, while platinum in matte was 7.7% lower at 203 000 oz.

MIMOSA

Tonnes milled at the Mimosa mine in Zimbabwe in the quarter was flat at 670 000 t, with platinum-in-concentrate production maintained at 30 000 oz.

Tonnes milled over the nine months to March increased by 2.5% to 2.04-million tonnes, yielding a 1.1% higher platinum in concentrate production of 91 000 oz.

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