Zim mine collapse hits Implats earnings

HARARE - Impala Platinum Holdings (Implats) — the world’s second-largest platinum producer — has projected lower earnings for the half year to December 2014 due to disruptions caused by the collapse of its Zimbabwean unit Zimplats’ Bimha Mine.

Bimha, the largest of Zimplats’ four mines, collapsed in July last year due to accelerated deterioration of ground conditions associated with a major shear, affecting nearly 50 percent of the mine’s current mining footprint.

Implats, which holds 87 percent of Zimplats, said it expects headline earnings per share (HEPS) to be 45 percent to 63 percent lower than prior comparable period.

It said the HEPS for the period could be between 53 cents and 77 cents while profits might fall by as much as 77 percent due to the mine workers strike that hit South Africa last year.

“After the impairment of property, plant and equipment as a result of the partial collapse of the Bimha operation at Zimplats, basic earnings per share (EPS) are expected to be between 33 and 48 cents which is between 77 percent and 67 percent lower than the previous year comparable period, being the half year ended December 31, 2013 (EPS 145 cents),” Implats said Monday.

Zimplats estimated that Bimha’s collapse would result in a production loss of 70 000 platinum ounces.

Implats, however, said the Zimbabwean unit is in a recovery drive as it was acting to mitigate the impact of the Bimha collapse.

“This recovery plan includes the mining and processing of supplementary open pit ore while the Bimha Mine is re-opened and re-developed,” Implats said.

According to the group, reviewed interim financial results for the period are set to be released on February 26.

Zimplats reported a depressed performance in the quarter to December 2014, with the miner posting a $20,5 million operating loss due to the Bimha collapse.

“Production during the quarter was significantly impacted by the precautionary closure of Bimha Mine (August 23, 2014),” said Zimplats in its quarterly report.

“However, productivity from these teams has been impacted by constrained redundancy. Consequently, tonnes mined decreased by 15 percent from the previous quarter,” it said.

Tonnes milled during the quarter under review decreased by 12 percent from the previous quarter due to lower mining volumes, resulting in an 11 percent decrease in 4E metal production in concentrate.

“Consequently, the company reported an operating loss of $20,5 million for the quarter… Revenue decreased by 24 percent from the previous quarter, impacted by an 18 percent decrease in gross revenue received per (4E) ounce and a seven percent decrease in sales volumes,” the miner said.


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