David Brown, CEO, Impala Platinum
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Impala investigates R3bn Marula expansion
David McKay
Posted: Thu, 30 Aug 2007

[miningmx.com] -- IMPALA Platinum said it may expand its 77.5%-owned Marula by about 115,000 oz following completion of a prefeasibility study which examined mining the operation’s Merensky reef. Capital spend of about R3bn was likely, the company said in an operating and results announcement for the financial year ended June.

“The Merenksy Reef project will incorporate the development of a new decline, concentrator, and supporting mining infrastructure,” the company said. “Initial forecasts indicate capital expenditure of R3bn.”

Marula produced 65,200 oz of platinum-in-concentrate in the financial year under review, nearly two-thirds higher than production at the mine in Impala’s 2006 financial year. Full annual production from the existing mine of 130,000 oz is expected in the 2010 financial year. Three empowerment entities, including Mmakau Mining, are the other major shareholders in the mine.

The expansion comes amid record production figures for Impala in the 2007 financial year of about 2 million oz.

Commenting on the production figures, CEO David Brown said: “This achievement, despite the disappointing performance at Impala Rustenburg, puts us firmly on track to achieve 2.5 million oz of platinum per year by 2012”.

Higher production and stronger metal prices helped Impala to a R7.3bn net profit, a 67% improvement year-on-year. The overall margin increased to 46%.

However, in an echo of the performance of its rival, Anglo Platinum, Impala struggled to contain unit costs and reported a disappointing safety performance.

Some 13 employees died at Impala Platinum mines during the financial year, a near doubling on the 7 killed in the 2006 financial year. Brown described the safety performance as “unsatisfactory”.

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Anglo Platinum’s poor safety performance, in which 16 employees were killed in mining accidents in the 6 months at Rustenburg section, resulted in the resignation of its CEO, Ralph Havenstein. Anglo Platinum is yet to appoint a long-term successor. “The reversal of major gains in safety that have been made in recent years are taken extremely seriously,” Impala Platinum said.

Unit costs increased 21% excluding share based payments. Brown said controlling costs remained “a challenge” for the group. The main reason for higher costs was the decline in production at Impala Rustenburg.

More expansion

In addition to Marula's proposed expansion, Impala said it would scheduled to begin development of the Leeuwkop project in the current (2008) financial year at a cost of about R3bn. It would add about 160,000 platinum ounces to Impala's overall portfolio.

Production had begun at Two Rivers will designed output of 120,000 oz of platinum on an annualised basis likely in the 2009 financial year.

In Zimbabwe, phase 1 expansion of Zimplats is "well underway" which will take combined production of the mine's opencast and new underground development to 160,000 oz/year by 2010. Zimplats produced 96,500 ounces of platinum in matte in the 2007 financial year, record output.

Impala Refining Services also had a record production year. It lifted production a third to 971,000 oz partly owing to extra material supplied by Lonmin.