Impala Platinum contributes 56% of the group’s production. The deterioration in safety performance at Impala Rustenburg, where the number of fatalities doubled periodon- period, is unacceptable. The primary cause of the majority of these incidents was equipment-related, whilst two were the result of falls of ground, the principal cause of fatal incidents in prior years. This change highlights the success of the fall-of-ground campaign, which was revitalised during the year.
However, it is disturbing that nine out of the 10 incidents were caused by noncompliance with safety standards and procedures. The focus going forward remains on leadership and training. In conjunction with these programmes, a communication initiative, known as Towards zero by 2012, is being undertaken in order to raise safety awareness levels and to engender a safety culture among all employees.
The quantum of Merensky ore milled declined by 12% to 6.8 million tonnes from the previous period, with underground ore sourced from UG2 remaining virtually unchanged at 7.8 million tonnes. The decline in Merensky can be attributed to a lack of adequate on-reef development on the major Merensky shafts, namely 11, 12 and 14. This resulted in limited face availability, and consequently a lack of mining flexibility. The decline in volumes is also attributed to poor operational efficiencies due to the failure to complete the mining cycle, which was compounded by safety stoppages and poor discipline.
This situation was further exacerbated by the slower-than-anticipated ramp-up of the decline shafts. The development of the declines was undertaken in the late 1990s as a capital-efficient way to access deeper mining areas in an environment of limited capital. However, they have proven difficult to operate due to the fact they are linked to existing operational shafts.
The decline in Merensky tonnage impacted on the ore mix, which increased to 55:45 in favour of the lower platinum grade UG2, which is characterised by lower recoveries. (The overall platinum yield for the UG2 is some 20% lower than that for the Merensky.) The drop in grade was further worsened by excessive dilution resulting from increased off-reef mining.
As a consequence, refined platinum production declined by 9% from 1 044 000 ounces in the previous year to 950 000 ounces. The lower volumes negatively impacted unit costs, which rose 31% to R8 559 (excluding share-based payments).
The key mining initiatives in FY2010 will focus on on-reef development and the timeous delivery of Merensky volumes, particularly at 11, 12 and 14 shafts.
In order to ensure the requisite mining flexibility, plans are in place to increase on-reef development by approximately 30% in the next financial year. New supervisory structures have been put in place to ensure delivery against these targets. These include dedicated development sections, better contractor management and enhanced team productivity. The latter will be addressed by implementing best-practice initiatives. It is estimated that it will take two years to restore on-reef/off-reef development to the correct balance. During this period, grade will continue to be impacted by the mix. We anticipate that within five years, Impala will be producing in excess of one million ounces of platinum per annum.
In the medium term, the older shafts will reach the end of their lives and be replaced by a new generation of deeper level shafts, namely 16, 17 and 20 shafts. Number 20 shaft will commence production in FY2011 and will be followed by 16 shaft in FY2013. At full production, these shafts will produce in the region of 330 000 ounces of platinum. The increase in tonnes from these new projects is anticipated to restore the ore mix back to 55:45 in favour of Merensky.
|Mining sales||(Rm)||15 250||20 889|
|Platinum||9 875||12 087|
|Rhodium||3 067||5 179|
|Mining cost of sales||(7 664)||(7 345)|
|On-mine operations||(5 428)||(5 860)|
|Processing operations||(1 349)||(1 057)|
|Increase in inventory||106||739|
|Mining gross profit||7 586||13 544|
|Other operating expenses||(325)||(426)|
|Mining profit from operations||6 888||12 570|
|Profit/(loss) from metal purchased transactions||18||54|
|Sales of metals purchased||10 060||15 638|
|Cost of metals purchased||(10 042)||(15 584)|
|Profit from operations in Implats group||6 906||12 624|
|Gross margin ex mine||(%)||49.7||64.8|
|Sales volumes ex mine|
|Platinum||(000 oz)||924.0||1 043.7|
|Sales volumes metals purchased IRS|
|Prices achieved ex mine|
|Platinum||($/oz)||1 228||1 588|
|Rhodium||3 733||6 941|
|Nickel||($/t)||12 774||30 206|
|Exchange rate achieved ex mine||(R/$)||8.56||7.29|
|Production ex mine|
|Tonnes milled ex-mine||(000 t)||15 102||15 855|
|% UG2 milled||(%)||54.9||50.7|
|Development metres||(metres)||92 358||90 656|
|Platinum refined||(000 oz)||950.5||1 044.0|
|Nickel refined||(000 t)||6.2||6.9|
|PGM refined production||(000 oz)||1 790.1||1 841.1|
|Total cost||(Rm)||7 465||7 819|
|per tonne milled||(R/t)||494||493|
|per PGM ounce refined||(R/oz)||4 170||4 247|
|per platinum ounce refined||(R/oz)||7 854||7 489|
|net of revenue received for other metals||(R/oz)||2 199||(941)|
|per platinum ounce refined|
(excluding share-based payments)
|(R/oz)||8 559||6 546|
|Capital expenditure||(Rm)||4 728||3 415|
|Labour including capital as at 30 June||(no)||43 326||44 921|
|Own employees||30 540||29 533|
|Contractors||12 786||15 388|
|Centares per panel man per month*||(m²/man)||34.6||37.8|
|* Conventional mining and own employees efficiency|
The R1-billion smelter expansion was completed at Mineral Processes in February with the commissioning of the gas-cleaning plant. In addition to increasing overall capacity to 2.8 million ounces of platinum, the plant is now fully compliant with the latest environmental legislation. The expansion to the tails retreatment plant, which involved a doubling of capacity, was completed on time and within budget. Initial indications are that this plant will improve overall recoveries by around 0.5% in the coming year.
The Phase II expansion at the Base Metals Refinery to 2.3 million ounces of platinum, which matches installed capacity at the Precious Metals Refinery (PMR), is scheduled for completion in 2010. The bankable feasibility study for the Phase IV expansion of the PMR to 2.8 million ounces of platinum was completed. However, due to the prevailing difficult economic conditions, it was considered prudent to place the expansion on hold. However, this expansion is of a modular nature and is able to be quickly activated when market conditions warrant.