Half of Implats's output from its 11 shafts around Rustenburg was unprofitable for the first six months of its 2018 financial year to end-June and new CEO Nico Muller said there was an urgency to "normalise" operations in the heart of the company.
Implats cut 1,400 jobs at a cost of R170m in the interim period, generating a R350m a year saving and has closed its old 4 Shaft, taking 10,000oz of production out of the group.
Over the next two years it will shut its 1 and 9 shafts, removing a further 100,000oz. Until these shafts are shut the remaining reserves will be "harvested", meaning no capital will be invested in them.
The 12 Shaft that accounts for 80,000oz will be shut in a similar time frame if productivity and costs do not improve or if the basket price for the platinum group metals it provides does not rise, said chief operating officer Gerhard Potgieter. A reduction of 15,000 tonnes of concentrate from the closed shafts could be replaced by concentrate from the Waterberg project Implats will share with Canada's Platinum Group Metals if there is a decision to build a mine there in the next few years, he said.
In four years, the two new 16 and 20 shafts will be in steady state production of 310,000oz a year, with the 11 and 14 shafts generating 250,000oz in total. These four shafts will account for 80% of production from the Rustenburg area and are being scrutinised over the next six months to ensure they are cash generative and suitably capitalised, Muller said.
The other 140,000oz to bring the Rustenburg shafts to a steady 700,000oz of platinum a year will come from the large 10 and 12 shafts.
Mark Munroe, a Lonmin veteran, has been tasked with managing the Rustenburg mines, restoring a profitable engine room for Implats during the next 18 months and putting it in a position where it can possibly enter the consolidation race.
Sibanye-Stillwater snapped up the Rustenburg mines once owned by Anglo American Platinum and Aquarius Platinum and is now in an all-share bid for Lonmin, but this swathe of mines and plants under a single owner has little effect on Implats, said Muller.
The most obvious synergies for Implats to unlock lie to its north where Royal Bafokeng Platinum is building the Styldrift mine in two phases and Implats is mining part of its smaller peer's resources under a royalty agreement.
The new 20 Shaft underground infrastructure could be used to more quickly and cheaply access the undeveloped second phase at Styldrift.
"There are potential longterm opportunities for us to collaborate. However a prerequisite for that is for us to get our house in order at Rustenburg," Muller said. "To consider anything before we do that would just create a lot of noise."
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