Home » Industry » Implats Looks Up to Zim Subsidiaries in 2015

Implats will be focusing on sustaining profitability for its Zimbabwean subsidiaries in the coming year, as indications are that 75 percent of the industry will run at a loss, Implats spokesperson, Johan Theron has said. In an interview, Mr Theron said the South African mining giant, which holds an 87 percent stake in Zimplats and 50 percent in Mimosa, will continue investing in its operations in 2015.

“At current metal prices, approximately 75 percent of the industry is expected to run at a loss, and those operations that are still making some money will be impacted in the way that they will be unable to invest and sustain their operations.

“In addition, the 2 560 000 Pt ounces available in above ground stocks (reported by the WPIC) will continue to impact metal prices in 2015.

“All of this, will clearly impact our ability to expand our activities in Zimbabwe. Our key focus in the depressed market will be to sustain profitability and continue investing into our operations as best we can,” he said.

Mr Theron said 2014 can best be described as a year of two halves where metal prices surged in the first half due to the strike action in South Africa and deteriorated in the second half of the year.

“On the positive side, we have seen metal prices rise in the first half of the year, largely as a result of industrial action in South Africa, which assisted financial performance. Unfortunately, we have also seen metal prices deteriorate significantly in the second half of 2014, largely as a result of a depressed global economy (particularly in Europe and China) and concerns that our metals remain oversupplied as a result of freely available above ground inventories accumulated over previous years.

“This will be the single biggest challenge for the industry in 2015,” he said.

Mr Theron said the deficit of 885 000 Pt ounces in 2014 reported by the World Platinum Investment Council (WPIC) in its inaugural report on Wednesday (27 percent higher than 695 000 oz in 2013) was clearly supportive of metal prices in 2014 (particularly in the first half of 2014).

He however said with the absence of the South African strike (approximately 1 300 000 oz impact), the supplydemand balance will be very different in 2015.

The WPIC also indicated that refined production is likely to be higher in 2015 as South African mines continue to recover, though it’s unlikely to return to 2013 levels. Demand is, however, expected to fall on the back of a drop in investments which is forecast to sag by 82 percent at the end of this year.

Source : The Herald