Community protests put Impala Platinum’s Marula mine at risk

Continuing community unrest and protest action in Mpumalanga is threatening the viability of Impala Platinum’s (Implats) Marula mine and the operation is to undergo a “fundamental restructuring” which could put more than 1,000 jobs at risk.

Implats’ acting CEO Gerhard Potgieter said – in the group’s report for the quarter to end-March released this morning – that the protest action, “ is directly related to certain community members being dissatisfied with the way in which the community’s 50% interest in the Makgomo Chrome project by their appointed/elected representatives.”

Potgieter added, “despite on-going engagement with all stakeholders to restore operational continuity and secure the financial sustainability of the operations, continued community protest action and persistently low metal prices have now necessitated a fundamental restructuring of the business in order to secure the financial viability of the operation in the current operating environment.”

He said Marula had given Section 189A notices to the regulator and representative trade unions “that may impact more than 1,000 job opportunities” and stated the process should be concluded before the end of June.

Civil unrest amongst the communities surrounding the platinum mines situated on the eastern limb of the Bushveld geological complex in Mpumalanga was highlighted on March 16 by ARM chairman Patrice Motsepe who said the highly politicized situation between the mining sector and the local communities had become “critical.”

ARM operates the Modikwe Platinum in Mpumalanga which has also been hit by civil unrest and against which ARM took a R734m impairment charge in its results for the six months to end-December.

Motsepe commented, “we have to engage very seriously with the communities , in particular because the capacity of the business constituency in this country to influence policy is zero at best. “

Motsepe attacked the country’s politicans saying the mining companies could expect no support from them and he was equally scathing about the political activists whom he said were misleading the communities.

He commented, “there are others who are misleading the communities for political reasons – saying ‘let them close the mines because we will run it ourselves’ – but they can’t even fasten their shoelaces.”

Potgieter reported that production from Marula dropped 43% to 221,000t milled in the March quarter (390,000t – March quarter 2016) which resulted in a 47% drop in platinum production to 9,000oz (17,000oz).

He pointed out that production from the nearby Two Rivers mine was also hit by community protest action in the area which, “was unrelated to the mine but which unfortunately prevented employees from reporting for duty. “

Platinum production at Two Rivers dropped 12% to 43,000oz from 49,000oz in the March quarter of 2016. Despite these setbacks Potgieter said that Implats has maintained its full year production guidance at 1.5m refined platinum ounces at a unit cost of R22,600/oz which is slightly up from the previous cost guidance of R22,200/oz.