Impala Platinum takes steps to soften impact of lower prices

Impala Platinum (Implats) CEO Nico Muller says the company has implemented measures to manage the low commodity price environment including zero salary increases for its board.

Responding to a question about the impact of falling prices during the company’s general meeting on Monday, Muller told shareholders the 30% decline in the metal basket price was topical and the company is not immune to price shocks. 

The average dollar platinum group metal (PGM) prices are falling as reduced vehicle sales have led to lower demand and a 30% decline in rhodium prices, a 20% decline in palladium prices and a 3% fall in platinum prices.

“We will not support loss-making operations. We will look at what is the best course of action,” Muller said.

He said in light of the weak metal price environment, the board agreed to a zero salary increase, and recruitments have been frozen across the group. The company has also cut discretionary spending in its corporate office and operations, and voluntary severance packages are proposed in the company’s corporate office. 

He said should the measures not yield the desired results, the company will look at restructuring operations.

“We will stop at nothing to ensure that our operations are sustainable, but we will use the winter to develop a stronger business for the future.”

Last week Sibanye-Stillwater announced the proposed restructuring and shaft closures at four PGM operations that could potentially affect 4,095 employees. Sibanye said the industry has been rocked by above-inflation increases in key cost components, including electricity and water tariffs, wages, fuel and other consumables' costs, and the recent decline in metal prices.

Similarly, globally diversified mining giant Anglo American is reportedly expecting a potential reduction in corporate office roles across several countries including South Africa.

Implats operates PGM mines in Rustenburg, Zimbabwe and Canada.

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