MIMOSA Mining Company (Mimosa) says six elements (6E) in concentrate volumes declined by 1% to 245 000 ounces during the financial year ended June 30, 2023 (FY23) due to severe load-shedding, among other challenges.
6E includes platinum, palladium, rhodium, gold, ruthenium and iridium.
Mimosa is jointly owned by Impala Platinum Holdings (Implats) and Sibanye Stillwater.
“Processing and plant stability was impacted by the commissioning and optimising of the concentrator project, power interruptions, changes in reagent supply and poor water quality,” the mining company said in a production update.
“Concentrate receipts from third parties declined by 18% to 287 000 6E ounces, with several operational challenges reported at peer-group producers and the termination of two contracts in third quarter FY2023.”
Mimosa said the operating environment in the period under review was typified by continuing headwinds, and regional power constraints providing a notable impediment to operational continuity and delivery.
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“While input pricing across key consumables eased in the latter half of FY23, rand depreciation persisted, limiting the benefit to our South African operations, and adversely impacting the translated dollar cost and capital base of our Zimbabwean and Canadian assets.”
Gross group 6E production increased by 2% to 3,25 million ounces, while production from managed operations increased by 6% to 2,42 million ounces.
Impala Rustenburg increased production by 3% to 1,23 million stock-adjusted 6E ounces despite the severity and frequency of load curtailment impacting operational continuity.
It said Zimplats benefited from the commissioning of the third concentrator at the end of the first quarter and, despite the impact of lower grade and regional power disruptions, delivered a 5% increase in 6E matte production to 611 000 ounces.
Operating momentum at Marula was negatively impacted by sporadic community unrest in the second half of the period, compounded by the impact of load curtailment resulting in a 7% decline from the record production achieved in FY22, to deliver 6E concentrate production of 241 000 ounces.
Impala Canada delivered a 17% gain in 6E concentrate production to 291 000 ounces, with increased throughput of higher-grade underground ore.
The report showed that production from joint ventures (JVs) declined by 1% to 541 000 6E ounces.
The group says it managed the lower stages of load curtailment by reducing power to its furnaces and concentrators, with mining and hoisting volumes impacted at higher stages.
These mitigatory actions resulted in a combination of “foregone” and “deferred” production volumes, it said.
“In addition to load curtailment at South African managed and JV operations during the period, severe load-shedding was experienced across the Zimbabwean national grid in March 2023, while operations at Mimosa were impacted by further intermittent power outages in May and June,” Mimosa said.
In total, the group estimates about 36 000 6E ounces of production were foregone across southern African managed and JV operations during the period, of which 28 000 6E and 8 000 6E ounces were attributable to Impala Rustenburg and the Zimbabwean operations, respectively.
Approximately 101 000 6E ounces were deferred as result of power constraints at the group’s smelting operations and the consequent delay to restart refurbished Number 4 furnace in the fourth quarter FY23.
A further 10 000 6E ounces were deferred due to cable theft at Impala Rustenburg, particularly the instance which resulted in power supply interruptions to the metallurgical complex.
Gross refined and saleable volumes declined by 4% to 2,96 million 6E ounces and Implats ended FY23 with excess inventory of approximately 245 000 6E ounces.
Sales volumes declined by 6% to 2,97 million 6E ounces, with limited destocking of refined metal inventories from an already reduced FY22 base.
Mimosa said softer United States dollar-basket pricing was partially offset by the rand exchange rate weakening by 16%, resulting in a 4% decline in group sales revenue to circa R36 120 per 6E ounce sold.
“Group capital expenditure is expected to have increased to circa R11,5 billion from R9,1 billion in the comparative period, due to higher levels of stay-in-business and replacement spend, and rand depreciation. Implats incurred growth capital of circa R1,9 billion in FY2023,” it said.
Group unit costs per 6E ounce are expected to increase to circa R19 840 on a stock-adjusted basis due to persistent inflationary pressures, which were exacerbated by the impact of rand depreciation on the translated dollar cost base of Zimplats and Impala Canada.