Platinum group metals (PGMs) miner Impala Platinum (Implats) CEO Nico Muller said in a production report for the three- and ninth-month periods ended March 31 that the well-documented increased severity of domestic and regional power constraints were notable impediments to the company’s operational delivery in the quarter.

As a result, Implats’ six-element (6E) PGMs production decreased by 2% year-on-year to 2.35-million ounces for the nine months ended March 31, with a 1% improvement in managed volumes to 1.74-million ounces, a 3% decrease in joint venture (JV) production to 396 000 oz and a 22% decrease in third-party receipts to 216 000 oz.

Gross 6E refined and saleable production declined by 9% to 2.14-million ounces in the nine-month period owing to the timing of processing maintenance and the increased frequency and severity of load curtailment.

Also, 6E sales volumes of 2.27-million ounces were 5% lower than the prior comparable nine-month period.

For the quarter, gross group 6E production declined by 5% to 735 000 oz.

Tonnes milled at managed operations improved by 5% to 5.61-million tonnes during the quarter, with higher volumes at Impala Rustenburg, Zimplats and Impala Canada offsetting lower mill throughput at Marula.

A 2% improvement in milled grade to 3.62 g/t 6E was partially offset by lower recoveries, resulting in 6E production at managed operations increasing by 2% to 562 000 oz.

Production from the joint ventures at Mimosa and Two Rivers declined by 8% to 125 000 oz.

At Impala Refining Services, third-party 6E receipts of 47 000 oz were 47% lower than the prior comparable quarter.

Refined 6E production, which includes saleable ounces from Impala Canada, declined by 10% to 662 000 oz.

Production in the quarter was impacted on by lower group production volumes and compounded by reduced available smelting capacity owing to scheduled maintenance and the increased severity and frequency of load curtailment in the quarter.

The scheduled rebuild of the Number 4 furnace, which began in November 2022, was completed as planned at the beginning of April, but experienced some delays in recommissioning owing to constrained power availability.

In addition to load curtailment at South African managed and JV operations, severe loadshedding was also experienced across the Zimbabwean national grid in March owing to generation constraints at the Hwange Power Stations and the curtailment of power imports following payment challenges.

Implats says it responds to load curtailment requirements through several operational interventions including reducing power to group smelters and adjusting milling, hoisting and re-mining rates.

The estimated impact of South African State-owned utility Eskom load curtailment on group production in the quarter resulted in the deferral of about 16 000 oz of 6E. Implats finished the period with about 190 000 oz of 6E excess inventory.

Also, 6E sales volumes of 752 000 oz declined by 10%, in line with lower refined volumes.

Implats says that, regrettably, three fatalities were recorded in the third quarter of its 2023 financial year, with a disappointing retracement in the recorded lost-time- and total-injury frequency rates.

“Our suite of capital projects was progressed across the group’s mining and processing assets and our team continued to engage with key stakeholders to secure the outstanding conditions precedent and conclude our offer for the remaining shares in Royal Bafokeng Platinum.

“Demand from our customers remained robust and the group maintained healthy operating margins and free cash flow generation in the quarter. PGM pricing faced several headwinds in the period, with the impact of short-term demand and supply dislocations in key markets exacerbated by financial flows,” Muller outlines.

He notes that some easing in input pricing across key consumables has emerged, but notable rand depreciation has persisted, limiting the benefit to Implats’ South African operations and adversely impacting the translated dollar cost and capital base of its Zimbabwean and Canadian assets.

“Group production remains vulnerable to the severity of regional load curtailment, which requires regular operational intervention and adjustments across our mining and processing assets.

“Given the constrained operating environment, full-year 2023 production is likely to be towards the lower end of the previously guided range, while unit costs are trending toward the top end of the provided guidance,” Muller says.

He adds that the group remains focused on delivering consistent and safe production, and constructively collaborating with its key stakeholders to ensure operational agility and flexibility in the remaining months of the year.