Implats’ earnings for the year to the end of June followed the same general path as its domestic rivals: profits declined from record levels on lower prices and production, but remained much higher than is usually the case. 

“In a period typified by increasing global macro-economic headwinds, escalating geopolitical conflict and several localised challenges, Implats continued to reap the benefit of elevated metal pricing, albeit off the record levels achieved in the prior comparable period,” the company said in a statement. 

Headline earnings of R32-billion were 12% lower than in the previous financial year, while Ebitda – earnings before interest, depreciation, taxes and amortisation – fell about 13% to almost R53.4-billion. The board declared a final dividend of 1,050 cents per share, bringing the total dividend for the year to 1,575 cents per share, down from 2,200 cents last year.

“Despite lower received rand PGM pricing and sales volumes, Implats delivered strong earnings and free cash flow… This was achieved while navigating numerous operational challenges, including rising input costs, constrained supply chains and labour market tightness, the impacts of which were compounded by extended safety stoppages, intermittent power supply and periods of community unrest,” the company said.

Community unrest is frequently mentioned in the results of mining companies, but Implats said that while it experienced some disruption from flare-ups this year, things were cooling down on that front. 

“We’ve not been incident-free… there were one or two road blockages at Two Rivers on the eastern limb, but we’ve actually gone through a period of improved stakeholder relationship,” Implats CEO Nico Muller told Business Maverick.

Visit Daily Maverick’s home page for more news, analysis and investigations

Northam Platinum said in its results last week that there had been 140 incidents of social unrest in the region in the financial year to the end of June, which impacted on mining operations. But it did note that much of it was concentrated in the southern section near the Limpopo/Mpumalanga border, and Implats’ operations are north of that. 

“Our Marula mine increased its production by 12%, and you can’t do that if you are blocked every day,” Muller said. A few years ago, Implats was considering closing Marula because of the levels of unrest around it, stoked in part by a chrome project with a tribal council that was not seen to be delivering wider benefits to the community.

“I attribute the improvement to our stakeholder relation teams and our investment in social projects, with the support of the community,” Muller said. 

Specifically, Implats estimates it lost 6,500 ounces in production to community unrest — a fraction of the almost 3.1 million ounces it produced over the course of the financial year. 

Eskom’s blackouts extracted a bigger toll, resulting in a direct loss of 18,000 ounces, while an illegal Numsa strike against a trio of contractors providing services to Implats around Rustenburg cost 28,000 lost ounces. 

The cumulative losses amounted to less than 2% of the company’s production for the year. So although such challenges remain costly, they are by no means crippling. DM/BM