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Implats delays Rustenburg shaft closures amid swing to FY'19 profit

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Implats delays Rustenburg shaft closures amid swing to FY'19 profit

Impala Platinum Holdings Ltd. said Sept. 5 that it swung to a fiscal 2019 profit from a year ago loss, boosted by higher sales volumes, higher rhodium and palladium prices in terms of rand, and improved performance at its Rustenburg mine.

The rand's weakness against the U.S. dollar and growth in demand for platinum group metals saw the company post headline EPS of 4.23 rand, compared to a headline loss of 1.71 rand per share a year earlier.

The company also postponed plans to close some of its shafts at its Rustenburg operations where some 13,000 jobs were expected to be lost as part of a strategic overhaul of its key operation, Reuters reported, citing CEO Nico Muller.

"We have already delayed the potential closure of 12 Shaft by a year and under the current market conditions and if the performance continues to improve there will be no reason to close 12 Shaft," Reuters quoted Muller as saying. Implats also delayed the closure of 9 Shaft to the second half of 2020.

The PGM miner reported 3.04 billion rand in headline earnings for the year ended June 30, compared to a headline loss of 1.23 billion rand in the prior year. As forecast in August, gross profit reached 6.84 billion rand for the year, soaring from 1.14 billion rand achieved in the previous financial year.

The strong performance was anchored by the operational turnaround at Impala Rustenburg, which represents about 50% of the group's mine‐to‐market production, the company said.

A 3% increase in concentrate production at Impala Rustenburg, despite the contraction of the mining footprint, together with maintained delivery from its Zimbabwe operation Zimplats Holdings Ltd., Mimosa and Marula operations, offset a weaker contribution from its Two Rivers mine.

Gross refined platinum output rose to 1.53 million ounces from 1.47 Moz year on year, with palladium output rising to 909,600 ounces from 849,300 ounces. Rhodium output was up at 205,900 ounces from 198,500 ounces, and nickel production slightly fell to 16,049 tonnes from 16,227 tonnes.

The company said challenges included load shedding from SA-power utility Eskom Holdings SOC Ltd., community disruptions at its Marula mine and ongoing political and economic uncertainty in Zimbabwe.

Based on the expectation of a return to profit at the end of the financial year, Implats in July opted to take advantage of strong cashflows and invited holders of convertible bonds to exercise their rights early.