Our business

Southern Africa

Impala Refining Services (IRS)

IImpala Refining Services (IRS) was created in July 1998 as a dedicated vehicle to house the toll refining and metal concentrate purchases built up by Implats. IRS is situated in Springs some 35 kilometres east of Johannesburg. IRS provides smelting and refining services through offtake agreements with group companies (except Impala) and third parties’ recycling and toll treatment. During FY2013, IRS reported attributable platinum production of 872 300 ounces (1.85 million ounces of PGMs).

The IRS model

The IRS model enables Implats to reduce its exposure to mining risk by using Impala’s excess smelting and refining capacity. At the same time this business also enables junior operators to exploit smaller PGM deposits. Typical IRS products include:

  • flotation concentrates from Marula, Mimosa, Two Rivers and other small mining contracts;
  • furnace matte from Zimplats;
  • spent autocatalysts for recycling; and
  • selected base metal residues and other secondary materials.

IRS enters into either metal purchase agreements or toll refining agreements, or a combination of the two. In metal purchase agreements a percentage of the contained value (allowing for Impala’s cost and a profit margin) is paid after an agreed processing period. In toll refining agreements, IRS charges the client a smelting, refining and handling fee and returns to the client, the metal after an agreed processing period. Impala, in turn, charges IRS a market-related fee for its expertise and the use of its processing facilities.

With the exception of mine-to-market operations, IRS has little or no control over volumes received from either third party or toll treatment contracts.

 

Business summary

Main areas of activity

  • Provides smelting and refining services through offtake agreements with Group companies (except Impala) and third parties
  • ecycling and toll-treatment
 

Operational review 2013

mpala Refining Services    
View latest Annual Report information  
 

OUTLOOK

In the medium term mine-to-market production will increase following the recent successful commissioning of the Phase 2 expansion at Zimplats and thereafter from further production increases at Marula. While growth is expected from non-managed production, the extent and timing of this growth, and, in particular, the resumption of currently suspended operations will be dictated by market conditions and the economic circumstances of the suppliers. With continued access to smelting and refining capacity from Impala, IRS remains well placed to process additional material from new recycling customers and opportunities in this regard are being evaluated.

IRS Platinum Production

  (’000oz)  2013   2012  
  Zimplats   180   185  
  Marula   71   63  
  Mimosa   97   100  
  Two Rivers   157   145  
  Third-party purchases, recycling and toll   368   205  
  Grand total   873   698  

 

Impala Refining Services - key statistics

    2013   2012   2011   2010   2009  
Sales   (Rm)  14 696   14 069   14 273   11 069   10 507  
Platinum     8 481   7 982   8 104   6 661   5 954  
Palladium     2 675   2 464   2 169   1 227   834  
Rhodium     794   1 113   1 376   1 242   2 142  
Nickel     1 164   1 236   1 305   1 024   755  
Other     1 582   1 274   1 319   915   822  
Cost of sales   (Rm)  (13 287)  (12 730)  (12 860)  (9 910)  (9 272) 
Metals purchased     (12 926)  (12 147)  (12 649)  (10 470)  (5 822) 
Smelting     (297)  (225)  (232)  (190)  (150) 
Refining     (399)  (378)  (366)  (318)  (229) 
Other operating cost     (37)  (37)  (30)  (29)  (30) 
Increase/(decrease) in metal inventories     372   57   417   1 097   (3 041) 
Gross profit IRS   (Rm)  1 409   1 339   1 413   1 159   1 235  
Metals purchased – adjustment on metal prices
and exchange rates*  
(Rm)  177   (195)  (20)  –   –  
Inventory – adjustment for metal prices and exchange rates   (Rm)  (189)  191   (4)  –   –  
Gross profit in Implats Group   (Rm)  1 397   1 335   1 389   1 159   1 235  
Gross margin   (%)  9.6   9.5   9.9   10.5   11.8  
Revenue   (Rm)  14 696   14 069   14 273   11 069   10 507  
Direct sales to customers     111   116   401   383   424  
Sales to Impala     14 139   13 702   13 427   10 354   9 778  
Treatment income – external     358   181   383   272   243  
Treatment income – intercompany     88   70   62   60   62  
Total sales volumes              
Platinum   (000oz)  629.8   638.2   684.2   615.4   556.7  
Palladium   (000oz)  460.5   468.3   474.2   434.3   371.8  
Rhodium   (000oz)  82.5   94.1   87.1   79.6   79.5  
Nickel   (t)  8 095   8 209   7 863   7 117   6 253  
Prices achieved              
Platinum   (US$/oz)  1 532   1 634   1 691   1 432   1 215  
Palladium   (US$/oz)  659   689   655   374   255  
Rhodium   (US$/oz)  1 099   1 549   2 254   2 065   3 210  
Nickel   (US$/t)  16 314   19 723   23 757   19 031   13 695  
Exchange rate achieved   (R/US$)  8.79   7.65   7.00   7.56   8.72  
Refined production              
Platinum   (000oz)  872.3   697.5   895.1   870.1   753.8  
Palladium   (000oz)  669.8   541.1   680.6   778.7   581.7  
Rhodium   (000oz)  118.4   111.1   134.8   130.5   124.4  
Nickel   (t)  11 983   10 582   10 829   10 314   8 339  
PGM refined production   (000oz)  1 854.9   1 527.9   1 918.2   1 974.7   1 638.1  
Metal returned              
Platinum   (000oz)  188.6   120.7   219.5   233.0   194.1  
Palladium   (000oz)  190.0   147.5   210.0   259.3   180.9  
Rhodium   (000oz)  35.5   24.8   41.7   49.3   37.5  
Nickel   (t)  3 193   3 093   3 370   2 792   2 480  
*Adjustments on metal prices and exchange rates have been reallocated to gross profit from other income and expense and foreign exchange profit or loss respectively in the statement of comprehensive income.