[miningmx.com] — IMPALA Platinum lifted its dividend by a fifth following a year that CEO, David Brown, described as among the worst in its history.
Some 15 miners lost their lives in underground accidents at Impala’s operations precipitating a review of its safety measures, while the market remained subdued as world economies continued to struggle against recessionary conditions.
However, Brown said that platinum demand remained in deficit and was supportive of company plans to produce 2.1 million ounces of platinum by 2014.
“The year under review has been one of the most difficult in the company’s history,” said Brown in commentary to Impala’s full year results on Thursday in which basic earnings per share fell to 786 cents, a 21% decline year-on-year.
“Not only did we have to contend with the global economic crisis, but also the impacts of both the tragedy at 14 shaft and the industrial action at the beginning of the period,” said Brown.
Impala had made inroads to addressings its development problems at its key Rustenburg mine while the first phase of its Zimplats expansion had been successfully commissioned, Brown said.
The total dividend per share increased 22% to R3.90/share following the announcement of a final dividend of R2.70/share, a signal the company remained bullish about prospects.
Lower platinum prices in 2009 enabled the Chinese platinum market to restock its pipelines while the launch of platinum and palladium-backed exchange traded funds encouraged a surge in investment demand, Impala said.
“These factors, coupled with a decline in supply, resulted in the platinum market remaining in deficit,” said Brown.
Operationally, Impala had a difficult financial year. Gross platinum production increased marginally some 2% to 1.74 million ounces. However, metal output at Impala Platinum lease fell 8% to 871,000 ounces owing to the accident at 14 shaft and industrial action.
As a result, unit costs increased. As a group, cost per platinum ounce was 11% higher at R10,089.
Zimplats shot the lights out in the 2009/2010 financial year ended June completing commissioning of its first phase expansion. A further $450m will now be spent on a second phase expansion that will see it increased output to 270,000 oz/year from the newly expanded 173,000 oz.
Impala’s Mimosa operation was steady but Marula continued to disappoint. Production ramp up “stalled” owing to lower mining flexibility, Impala said. Two Rivers lifted output nearly a fifth.
Brown said the risks of returning to recession globally was unlikely which meant the platinum market was likely to remain in deficit in the current financial year. “The group is well positioned to benefit from the positive medium to long term fundamentals with the delivery of the new mining projects at Rustenburg and growth opportunities throughout the group,” Brown said.
