Our business

Southern Africa

Impala Refining Services (IRS)

Impala Refining Services (IRS) was established in July 1998 to take advantage of Impala’s excess concentrating, smelting and refining capacity.  The refinerie are 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 FY2014, IRS reported attributable platinum production of 767 000 ounces (1.6 million ounces of PGMs).

Operational review 2014

 

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
 

The IRS model

The IRS model mitigates Implats’ 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 the metal to the client 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.

IRS production

000 oz   2014   2013   2012   2011   2010  
  Zimplats   226   180   185   175   154  
  Marula   77   71   63   71   68  
  Mimosa   103   97   100   99   94  
  Two Rivers   168   157   145   142   135  
Mine-to-market operations   575   505   493   487   451  
  Third-party purchases, recycling and toll   192   368   205   408   419  
Grand total   767   873   698   895   870  

 

OUTLOOK

In the short term, mine-to-market production will decline mainly as volumes from Zimplats are expected to reduce due to the temporary closure of Bimha mine. The resumption of non-managed, currently suspended operations will continue to be determined by market conditions and the economic circumstances of the respective operators.  Despite this uncertainty IRS continues to have access to spare smelting and refining capacity from Impala and remains well placed to process additional material from new customers.  Opportunities in this regard are evaluated on an ongoing basis.

KEY STATISTICS

Refined production     2014   2013   2012   2011   2010  
  Platinum   ('000oz)  767.0   872.3   697.5   895.1   870.1  
  Palladium   ('000oz)  513.0   669.8   541.1   680.6   778.7  
  Rhodium   ('000oz)  107.3   118.4   111.1   134.8   130.5  
  Nickel   (t)  11 939   11 983   10 582   10 829   10 314  
  PGM refined production   ('000oz)  1 604.5   1 854.9   1 527.9   1 918.2   1 974.7  
               
Metal returned     2014   2013   2012   2011   2010  
  Platinum   ('000oz)  94.5   188.6   120.7   219.5   233.0  
  Palladium   ('000oz)  28.2   190.0   147.5   210.0   259.3  
  Rhodium   ('000oz)  9.0   35.5   24.8   41.7   49.3  
  Nickel   ('000t)  3 186   3 193   3 093   3 370   2 792  
               
Cost     2014   2013   2012   2011   2010  
Cost of sales   (Rm)  (16 794)  (13 287)  (12 730)  (12 860)  (9 910) 
  Metals purchased   (Rm)  (16 665)  (12 926)  (12 147)  (12 649)  (10 470) 
  Smelting   (Rm)  (308)  (297)  (225)  (232)  (190) 
  Refining    (Rm)  (450)  (399)  (378)  (366)  (318) 
  Selling and administration     (31)  (37)  (37)  (30)  (29) 
  Increase/(decrease) in metal inventories   (Rm)  660   372   57   417   1 097  
               
Financial ratios     2014   2013   2012   2011   2010  
  Gross margin ex mine   (%)  9.2   9.6   9.5   9.9   10.5  
               
Total sales volumes     2014   2013   2012   2011   2010  
  Platinum   ('000oz)  707.1   629.8   638.2   684.2   615.4  
  Palladium   ('000oz)  527.1   460.5   468.3   474.2   434.3  
  Rhodium   ('000oz)  94.4   82.5   94.1   87.1   79.6  
  Nickel   (t)  9 195   8 095   8 209   7 863   7 117  
               
Prices achieved     2014   2013   2012   2011   2010  
  Platinum   (US$/oz)  1 427   1 532   1 634   1 691   1 432  
  Palladium   (US$/oz)  742   659   689   655   374  
  Rhodium   (US$/oz)  982   1 099   1 549   2 254   2 065  
  Nickel   (US$/t)  14 702   16 314   19 723   23 757   19 031  
               
Exchange rate achieved   2014   2013   2012   2011   2010  
  Exchange rate achieved   (RUS$)  10.30   8.79   7.65   7.00   7.56