Known colloquially as “the engine”, Implats’ major operational unit, Impala Platinum, comprises 13 shaft systems and Mineral Processes (concentrating and smelting activities) located near the towns of Phokeng and Rustenburg on the world-renowned Bushveld Complex, as well as the company’s Precious Metals and Base Metals Refineries some 200 kilometres away, near Springs in Gauteng. These operations employed 27 979 people during 2001.

Safety
The tragic loss during the year of 13 employees in work-related accidents was a devastating reversal of the previous year’s significant success in making the business of mining less hazardous. The fatality rate of 0.16 per million man hours reflects the second worst year since 1997.

Falls of ground accidents remain the biggest cause of fatalities and claimed four lives this year; followed by scraper and winch operation related accidents; explosive accidents; and rock handling accidents. Two fatalities also occurred at the 14 shaft project.

A root cause analysis by International Risk Control Africa (IRCA) of these accidents revealed that too much effort is being placed on managing the consequences of accidents rather than preventing them, indicating a need to address the safety culture of the company. Safety was further compromised by the loss of experienced crew captains during the course of the year.

On the positive side, internal and external audits have indicated that safety programmes and training are in place and this is reflected in the improving trend of the lost time injury frequency rate. This year’s rate of 8.5 lost time injuries per million man hours is the best ever, and shows an improvement of 32% compared to last year. Two shafts achieved two million fatality free shifts and a further five achieved one million shifts during the course of the year. The operations as a whole achieved this milestone twice.

The emphasis for the year to follow is on ensuring that:
• management accepts accountability for the safety culture of the organisation
• risk assessments take place
• new, inexperienced crew captains receive further best practice training
• contractors’ health, safety and environmental management systems and training are aligned with those of    Impala.

During the year:
• Good progress was made with training at all levels. An additional 1 642 safety representatives completed a    safety representative training programme. Some 500 crew captains completed a risk management    programme and 580 passed a principles of supervision programme.
• Four CAP (Common Audit Process measure against ISO standards) were conducted and an external audit    of the code of practice to combat rock falls and rockburst accidents was concluded.
• A joint Health, Safety and Environment summit was held with participation from all stakeholders.

Impala Refineries achieved its lowest ever lost time injury frequency rate of 0.8 per million man hours. The Refineries achieved a NOSCAR rating during 1999 and has maintained it since then.

During the coming year Implats will:
• Improve support standards in stoping and development areas
• Improve action-plan implementation following risk assessments and routine process measurement audits
• Formalise a monitoring programme for action-plan implementation to ensure continuous improvement
• Develop a process for accumulating corrective and preventative action resulting from audits, inspections    and other management-measurements systems

Mining Tons mined increased by 3.3% on last year to 15.05 million. Headgrade declined slightly, however, to 4.9 g/t owing to a narrowing of the Merensky channel and an increase in pre- and redevelopment. Headgrade should improve in the year ahead as more ore will be mined from the Merensky reef. On-mine cost per ton mined increased from R137 to R154 (12%) mainly as a result of an above inflation wage increase of 9% and an additional 3% as a result of the implementation of the Basic Conditions of Employment Act. An increase (6%) in on-reef development from 210 700 metres in 2000 to 224 200 metres in 2001 also had an adverse effect on costs. Problems in the concentrator resulted in 210 000 tons of ore being added to the live ore stockpile, again adding to costs. Cost performance on a tons milled basis therefore increased from R136 to R156 (14.7%).

Decline projects
Impala aims to maintain production at the one million ounce level until 2030 at an affordable annual capital cost. To achieve this, Impala embarked on a programme to extend the lives of the third generation shafts by means of decline shafts or shaft systems that utilise existing infrastructure. Five decline shafts and a vertical shaft to link in with 12 shaft are currently in progress at a total capital cost of R4 billion (US$486 million). Excellent progress has been made during the year with production beginning at several declines as scheduled:

10 shaft: Development of the 10 shaft decline began in 1993. Mining at this triple decline system began in 1997 and the first three levels are already producing. Development of the final level station is in progress and full production should be achieved by October 2001.

1 shaft: This project commenced in 1997. Production from the first level was achieved in July 2000. Rock weakness led to some modifications to this decline that will now comprise four rather than six levels. Production will be unaffected as the change has allowed earlier mining than originally planned. Full production will be achieved in the 2004 financial year.

11 shaft: Sinking commenced at this triple decline system in 1999. Stoping will commence in 2002 and full production will be attained in 2007. The ventilation shaft has been commissioned and sinking of the second downcast man and material shaft will start in 2001.

12 shaft south: The start-up development of this three level, twin-shaft decline is well advanced. The first level was accessed in March 2001 and full production should be attained in 2004.

12 shaft north: Work on this vertical shaft system commenced in June 2001. The system comprises a downcast man and material shaft and an upcast ventilation shaft. The first ore from this project will be processed in the 2004 financial year. This shaft is the first at the Rustenburg operations to embrace the "pillar and stall" mining method, using trackless machinery and conveyor belts for moving ore.

14 shaft: This project comprises the development of a five-level decline and the upgrading of infrastructure for increased tonnages. Development commenced in 1999 and good progress was made to establish the access ways. Shaft sinking of a vertical ventilation shaft is also underway. Final project completion is scheduled for 2006.

Decline Projects
			Maximum production
Project	Start of mining		/month (m2)		Reserves (‘000t)		Reefs mined		Capex (R million)		Life of shaft (years)
10# decline	2000		28 000		20 675		Merensky		171		29
1# decline	2000		45 000		25 761		Merensky and UG2		726		16
11# decline	2001		45 000		15 001		Merensky and UG2		721		14
12# south decline	2002		18 000		5 151		Merensky		256		8
14# decline	2004		45 000		37 922		Merensky and UG2		1 656		25
12 # north decline	2004		15 000		8 263		Merensky		471		10

Metallurgical processing
Impala continues to dedicate significant attention and resources to its metallurgical operations with a capital expenditure programme of R280 million in 2001 for concentrating and smelting. This will reduce to R100 million in 2002.

Concentrator
Tons milled for the year were 14.84 million, 210 000 tons less than tons mined, mainly due to an additional public holiday and a three day stoppage at the UG2 plant owing to an electric substation failure.

Problems were also experienced with the start up of the UG2 ore separation project. The plant was commissioned two months late and recoveries were not at expected levels. Throughput improved to acceptable levels and a 30% increase in plant capacity was realised by year-end. Initial results indicate a 3% cost per ton reduction. Work to balance the volumes through the high grade and low grade circuits to improve recoveries is in progress. The higher volume through the UG2 plant will enable more mills to be dedicated to Merensky ore in the main plant, allowing for a finer grind and thus improved recoveries. Stabilisation and optimisation of the Merensky flotation plant has continued but further optimisation is required in order to achieve design recoveries.

The net impact of these difficulties has been a 2.5% drop in metallurgical recoveries compared to the previous year.

Smelter
Impala’s smelting operation continued its excellent performance during the year. The smelter expansion project was delivered timeously and within the R230 million budget. The expected benefits of capital efficiency, by far the lowest costs in the industry, and increased flexibility and contingency have been realised.

However, the refractory bricks of the new furnace housing started to crack soon after commissioning, apparently as a result of a problem with the brick manufacture. Although the furnace itself is stable and extensive condition monitoring continues, operating life will be shortened. A spare furnace lining has also been ordered from Austria which will arrive in October 2001.

The smelter complex processed a record 79 800 kilograms of matte this year, a
13% increase on 2000. Concentrating and smelting costs increased from R30 to R32 per ton (6.8%) and were well contained given the amount of construction work in the area.

Impala mining statistics
		2001			2000			1999			1998			1997
Tons milled	(’000)	14 840			14 662			14 638			14 509			13 775
% UG2 milled		49.6			50.6			48.1			45.9			45.6
Headgrade (g/t 5 PGE + Au)		4.90			4.97			5.31			5.17			5.22
M2 per stoping employee		41			40			41			40			36
Tons per employee		53			51			51			48			44
Number of employees (working cost)	(’000)	28.0			28.3			28.7			29.5			31.0

Refineries
The Refineries’ solid performance was sustained and the cost per refined platinum ounce was contained to an increase of only 7.4% despite substantial cost increases in reagents and chemicals.

The completion of process enhancements at the Enhanced Precious Metals Refinery (EPMR) led to much improved performance in the rhodium and iridium circuits with a further release of metal from process inventories. A programme of fine-tuning the EPMR circuit will commence in the new financial year at a capital cost of some R50 million. These will allow for throughput in excess of 2 million ounces of platinum per year, along with associated pgms.

People and technology
The concept of unlocking the potential of our people is a key strategic driver for Impala. As our employees’ skills increase, the need for new technology to improve performance further and ensure our position as industry leader in efficiencies becomes increasingly important. Thus, a strategy combining the performance of our people and advances in technology, will continue to deliver the improvements in efficiencies for which the company has become known within the industry.

Five years ago Impala introduced the Fixco process with the "One team – one vision" concept central to that initiative. The aim of Fixco was to secure Impala’s long-term future through a real reduction in unit costs at a time when the company was viewed as competitively disadvantaged by its high cost of production and labouring under a capital inefficient expenditure programme. This objective was achieved by drawing on the combined energies and initiatives of the people of Impala – and with a dramatic decrease in the labour force – resulted in Impala boasting the highest productivity levels in the South African hard rock mining industry.

During 1999/2000, Implats realised, however, that the impetus of the initial Fixco process had largely dissipated and that, with certain once-off initiatives having being achieved, step-change improvements were unlikely.

New Fixco initiatives
A highlight of the year was undoubtedly the re-energising of the Fixco process by the combined management/employee team as part of Impala’s core “One team – one vision” philosophy. This vision continues to have as its aim the delivery of just over a million ounces of platinum per annum from the Impala lease area over the life-of-mine, with unit costs in line with or better than inflation and an affordable capital funding programme.

The management-employee Fixco committee is focused on three key areas, headgrade, recoveries and efficiencies and has identified 18 separate initiatives and appointed a champion at mine level to lead each initiative. The committee meets on a regular basis to evaluate progress and determine new objectives.

Major advances have been achieved during the year:
• Production efficiencies across the operation are up from 40m2 per employee to    41m2 per employee, which    equals the previous record achievement in 1999;
• A 5% reduction in compressed air usage achieved;
• A 3% improvement was recorded in Merensky headgrade in the last quarter.

In the past a great deal of emphasis was placed on reducing employee numbers, but no major decrease is anticipated over the next few years. Instead, the implementation of Fixco and other control mechanisms to identify and address problem areas are poised to deliver the requisite improvements in productivity.

Breakthrough technology
From trackless mining to new cutting and blasting techniques, leading to better mine layouts, improved safety and productivity are expected to provide further impetus to Impala’s drive for the highest efficiencies and lowest costs in the industry.

Implats is currently engaged in a number of new technology initiatives either directly or in partnerships with research organisations, suppliers and other companies. This thrust is aimed at mechanisation that can be applied to a relatively narrow, tabular hard rock orebody. The challenge is to tap the appropriate technology to deliver cost reductions, productivity improvements and improved safety.

Exploration
Evaluation of the Impala lease area continued during the year with a 3D seismic survey extending to the southern border of the property and to 1 800 metres below surface. Fifteen boreholes were drilled in the deeper part of the lease area to supplement seismic surveys, while 86 shallow boreholes were drilled to evaluate the Merensky open-cast potential.

* Current face advance with manual mining methods = 22 m2