[miningmx.com] – THE resignation of Impala Platinum’s (Implats’) operations director, Paul Dunne, was quietly announced by the platinum producer last month, but the lead-up to the executive’s departure was far from peaceable.
A week prior to the announcement of Dunne’s resignation, virtually an Implats lifer having put in some 16 years at the company, rumours were swirling about a rebellion among the management ranks at the platinum company.
According to one source, employees had been called in by Implats CEO, Terence Goodlace, to address a deterioration in relations among certain employees – a series of meeting triggered by alcohol-fuelled comments made at the farewell of another long-time servant at the company, Bob Gilmour.
Johan Theron, head of corporate relations at the company, told Miningmx that recent events at Implats were not extraordinary given the pressure the entire platinum sector was under. “We’re going through a difficult re-alignment process in Rustenburg,’ he said. “It’s certainly hot in the kitchen,’ he added.
Those pressures are certainly on show in the company’s first quarter production figures released today in which gross platinum production decreased 17% to 376 000 ounces for the quarter compared with the corresponding period for the prior year.
The difference is largely owing to lower throughput at Impala Refining Services (IRS) which fell 31% to 181,000 ounces in the first quarter year-on-year. This was owing to the halting in deliveries from A1, Implats’s recycling customer, against which there is a legal dispute underway after Implats wrote down R1.3bn in bad debt.
Implats’ Lease Area mine (Impala) actually lifted refined platinum production marginally by virtue of locked-up metal that was released and the treatment of higher grade material. Impala is in the throes of restructuring with the new 16 shaft coming on line during the period; suffice to say, there are currently alot of moving parts at Implats.
For instance, the company has to contend with pressure from the Association of Mineworkers & Construction Union (AMCU) which is to proceed with strike action at Implats’ mines over a pay dispute.
Notably, Implats said that unit costs were affected by mining inflation and the transition from old to new shafts at Impala Rustenburg in the first quarter. Cost per platinum ounce rose by approximately 8% from the corresponding period to R16,600 per platinum ounce in the quarter, it said.
In any event, there has been no rebellion against Goodlace. The strategy to improve mine safety, invest in the orebodies, and restore Implats’ key Lease Area mine to production figures of 850,000 ounces/year by 2018, while building the 20, 16 and 17 shafts, continues undisturbed.
Dunne elected to resign. For its part, Implats said it was working on a replacement for a head of operations for Rustenburg. If anything, the news of unquiet at Implats is inevitable; positive even.
Goodlace has been at the company for a year and is slowing making the alterations in both operating practices and human capital that he thinks are required, especially dealing with his major criticism of the company that it had little development of its existing mines which led to a lack of mining flexibility.
Said an analyst: “Perhaps Dunne carried responsibility for under-investing in short-term mineral reserves. People were commenting on the problems the company faced, longer term capex projects were well advanced but in the interim they were facing serious problems.’
And despite the lower production figures for the first quarter there is some assistance from the rand/dollar exchange rate which averaged just over R10 in the first quarter compared to R8.25 to the dollar in the corresponding quarter of the previous financial year.
