- Refined platinum production of 721,000 ounces
- Refined PGM production of 1.5 million ounces
- Contribution of 18% to group headline profit
- Sales volumes up by 18.4% to 527,100 ounces of platinum
Introduction
Impala Refining Services (IRS) houses Implats’ toll refining
activities by capitalising on the capacity within the group,
specifically processing and refining capacity and the group’s
marketing expertise. In addition to its toll refining activities,
IRS also purchases concentrate from independent
companies.
Operational review
Refined platinum production by IRS in FY2006 amounted to
721,000 ounces, a decline of 1.7% on the 733,300
ounces refined the previous year. Refined PGM production
totalled 1.487 million ounces. The decline in production
was due largely to movements in pipeline stock which
resulted in an increase in inventories for the year.
Refined production was underpinned by increased volumes
from long-standing partner A-1 Specialised Services and
Supplies Inc. Increased metal deliveries were received from
Zimplats, Mimosa and Marula, and from Barplats’
operation, Crocodile River. Higher-than-expected volumes
were received from Everest, which began deliveries of
concentrate ahead of schedule.
The off-take contract with Messina came to an end in
FY2006 while Kroondal’s off-take contract with IRS will
come to end in FY2008.
IRS - contribution to group platinum production
(%)
 |
IRS key statistics
| |
|
|
FY2006 |
|
FY2005 |
|
% change |
|
| Sales |
(Rm) |
|
6,221.6 |
|
4,072.3 |
|
52.8 |
|
| Platinum |
|
|
3,319.6 |
|
2,285.5 |
|
45.2 |
|
| Palladium |
|
|
556.5 |
|
426.0 |
|
30.6 |
|
| Rhodium |
|
|
1,350.0 |
|
468.1 |
|
188.4 |
|
| Nickel |
|
|
578.8 |
|
536.5 |
|
7.9 |
|
| Other |
|
|
416.7 |
|
356.2 |
|
17.0 |
|
| Cost of sales |
(Rm) |
|
(5,336.5) |
|
(3,460.5) |
|
(54.2) |
|
| Metals purchased |
|
|
(6,137.7) |
|
(3,635.6) |
|
(68.8) |
|
| Smelting and refining |
|
|
|
|
|
|
|
|
| costs |
|
|
(238.6) |
|
(188.8) |
|
(26.4) |
|
| Increase in inventories |
|
|
1,039.8 |
|
363.9 |
|
185.7 |
|
| Gross profit |
|
|
885.1 |
|
611.8 |
|
44.7 |
|
| |
|
|
|
|
|
|
|
|
| Gross margin |
(%) |
|
14.2 |
|
15.0 |
|
(5.3) |
|
| |
|
|
|
|
|
|
|
|
| Other operating costs |
(Rm) |
|
(13.1) |
|
(29.2) |
|
55.1 |
|
| Sales |
(Rm) |
|
6,221.6 |
|
4,072.3 |
|
52.8 |
|
| Direct sales to customers |
|
|
384.7 |
|
261.5 |
|
47.1 |
|
| Sales to Impala |
|
|
5,662.5 |
|
3,630.7 |
|
56.0 |
|
| Toll income |
|
|
174.4 |
|
180.1 |
|
(3.2) |
|
| Total sales volume |
|
|
|
|
|
|
|
|
| Platinum |
(000 oz) |
|
527.1 |
|
445.2 |
|
18.4 |
|
| Palladium |
(000 oz) |
|
335.7 |
|
313.3 |
|
7.1 |
|
| Rhodium |
(000 oz) |
|
71.2 |
|
61.0 |
|
16.7 |
|
| Nickel |
(000 t) |
|
6.1 |
|
5.9 |
|
3.4 |
|
| Prices achieved |
|
|
|
|
|
|
|
|
| Platinum |
($/oz) |
|
987 |
|
828 |
|
19.2 |
|
| Palladium |
($/oz) |
|
260 |
|
219 |
|
18.7 |
|
| Rhodium |
($/oz) |
|
2,975 |
|
1,240 |
|
139.9 |
|
| Nickel |
($/t) |
|
14,986 |
|
14,540 |
|
3.1 |
|
| Exchange rate achieved |
(R/$) |
|
6.37 |
|
6.20 |
|
2.7 |
|
| Refined production |
|
|
|
|
|
|
|
|
| Platinum |
(000 oz) |
|
721.0 |
|
733.3 |
|
(1.7) |
|
| Palladium |
(000 oz) |
|
496.5 |
|
513.9 |
|
(3.4) |
|
| Rhodium |
(000 oz) |
|
113.2 |
|
103.8 |
|
9.1 |
|
| Nickel |
(000 t) |
|
7.7 |
|
8.1 |
|
(4.9) |
|
| Total PGM |
(000 oz) |
|
1,487.1 |
|
1,486.8 |
|
0.0 |
|
| Metal returned |
|
|
|
|
|
|
|
|
| Platinum |
(000 oz) |
|
246.3 |
|
246.2 |
|
(0.0) |
|
| Palladium |
(000 oz) |
|
189.9 |
|
159.5 |
|
19.1 |
|
| Rhodium |
(000 oz) |
|
41.5 |
|
53.8 |
|
(22.9) |
|
| Nickel |
(000 t) |
|
2.2 |
|
1.9 |
|
15.8 |
|
IRS – headline profit and contribution to group
| |
|
|
|
|
% contribution |
|
| |
Profit (Rm) |
|
|
|
to group |
|
| 2002 |
416 |
|
|
|
9.0 |
|
| 2003 |
151 |
|
|
|
4.4 |
|
| 2004 |
394 |
|
|
|
13.4 |
|
| 2005 |
466 |
|
|
|
16.3 |
|
| 2006 |
715 |
|
|
|
18.1 |
|
| |
|
|
|
|
|
|
Refined platinum production (000 oz)
| |
FY2006 |
|
FY2005 |
% change |
|
| Zimplats |
89.0 |
|
82.4 |
8.0 |
|
| Marula |
37.0 |
|
30.9 |
19.7 |
|
| Mimosa |
66.4 |
|
60.8 |
9.2 |
|
| Aquarius Platinum SA |
214.9 |
|
215.5 |
(0.3) |
|
| Lonplats (excluding Messina) |
22.2 |
|
32.5 |
(31.7) |
|
| Other |
291.5 |
|
311.2 |
(6.3) |
|
| Total |
721.0 |
|
733.3 |
(1.7) |
|
Financial review
IRS’ gross profit increased by 45% to R885 million in FY2006
from R612 million in FY2005. This increase was largely a
result of the substantial increase in PGM prices, and in
particular the prices of platinum and rhodium during the latter
half of the year. Operating margins declined to 14.2% from
15% in the previous year owing to reduced tolling
volumes. While the rand maintained its strength for most of the
year, the decline in its value in June, when it fell by 10%
against the dollar, resulted in the realisation of translation
gains.
Outlook
The outlook for FY2007 is encouraging and a substantial
increase in refined ounces is forecast. Increased metal
deliveries are expected from A-1, Marula Platinum, Mimosa,
Two Rivers and Aquarius Platinum’s Everest mine. In addition,
in the longer term, there will be increased metal deliveries from
Zimplats, Blue Ridge mine, with which a life-of-mine off-take
agreement has recently been concluded, and other potential
entrants into the sector. This forecast is in line with the group
strategy of increasing refined platinum production to
2.3 million ounces by 2010.
Impala Platinum Holdings Limited - Annual Report 2006
|
