HomeNewsImplats Q1 platinum, palladium output down 12 pct y/y

Implats Q1 platinum, palladium output down 12 pct y/y

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* Operational issues at third parties hamper output

* 8,000 ounces lost to safety stoppages (Adds details, analyst comment, shares)

Impala Platinum , the world’s second-largest platinum producer, said on Thursday first-quarter gross platinum production declined by 12 percent to 388,000 ounces due to operational issues at third parties and safety stoppages.

Palladium production declined in line with platinum output.

Implats said around 8,000 ounces were lost during the quarter as a result of safety-related stoppages. Three of the company’s employees were killed in the quarter.

It also said 34,000 ounces of once-off Lonmin toll material was processed in the previous comparable quarter which comprised the bulk of the fall in production.

Implats said output of platinum in matte at its Zimbabwe unit Zimplats rose marginally to 45,000 ounces despite the uncertainties around a drive by the government there to force foreign miners to surrender 51 percent stakes in their operations to local blacks.

Implats said last month it has agreed to turn over a 10 percent stake in its Zimbabwe unit to locals after facing pressure from the government to give up equity or lose out in the state with the world’s second largest platinum reserves.

The 10 percent stake is the first tranche in what is supposed to be a majority stake. Zimbabwe has not provided clear guidelines on how and when it expects companies to comply.

Implats said in August that it was on course to reach platinum output of 2 million ounces by 2014 as new shafts ramp up but before then production would be restrained by aging infrastructure and was seen falling 7.5 percent to 1.7 million ounces over the 2012 financial year.

Implats said first-quarter group unit costs per platinum ounce produced, excluding share-based payments, rose by 10.8 percent due to high wage settlements and steep increases in power prices.

Implats’ share price was down over four percent at 1445 GMT compared to a one percent fall in the blue-chip Top-40 index .

“We believe these results are a good reflection of most of the PGM industry in South Africa – where production is flat to down year on year, while costs are up sharply,” RBC Capital Markets said in a brief research note.

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