About Implats
Our operating

Creating and realising value depends on successfully negotiating a changing operating environment where several issues have important implications for our business model.


In October 2018 the International Monetary Fund (IMF) estimated that the global economy will grow 3.7% in 2018, the same as in 2017 but down from the 3.9% it was forecasting for 2018 in July. It slashed its outlook for the 19 countries that use the euro currency and for Central and Eastern Europe, Latin America, the Middle East and sub-Saharan Africa. The IMF highlights that expansion is becoming less even, and risks to the outlook are mounting on the back of trade tensions, which it warned could “significantly harm global growth”.

Among emerging markets and developing economies, growth prospects are also becoming more uneven, amid rising oil prices, higher yields in the US, escalating trade tensions, and market pressures on the currencies of some economies with weaker fundamentals.

The IMF highlights that the announced and anticipated tariff increases by the US and retaliatory measures by trading partners have increased the likelihood of escalating and sustained trade actions. These, they suggest, could derail the recovery and depress medium-term growth prospects, both through their direct impact on resource allocation and

Impact on value

  • The IMF has warned that a further escalation of trade tensions, as well as rising geopolitical risks and policy uncertainty in major economies, could lead to a sudden deterioration in risk sentiment
  • According to the organisation, that could trigger a broad-based correction in global capital markets and a sharp tightening of global financial conditions
  • The potential of a US-China tariff war could negatively impact platinum, palladium and rhodium for the remainder of the year

Our response

  • We remain sceptical of a near-term PGM price recovery in the face of lingering economic uncertainty
  • We actively and continuously assess conditions in the countries where we sell our metals across all the key demand sectors
  • Our market development activities are tailored to support key market segments and grow new areas of demand
  • We are aligned with and support key institutional partners (such as WPIC, PGI, IPA)
  • Relationships with key customers, globally, are grown and sustained


The socio-political context in the countries in which we operate – South Africa and Zimbabwe – remains dynamic. There is considerably more optimism and regulatory certainty in both jurisdictions. The newly gazetted Mining Charter has provided some level of certainty in the South African policy and regulatory framework There remains some ongoing policy uncertainty in both countries.

Impact on value

  • A more collaborative and trusting environment is being established between government and business in South Africa following the gazetting of the new Mining Charter, which enhances the likelihood of constructive outcomes that will attract investors back to the mining sector
  • In Zimbabwe, Zimplats successfully settled a longstanding dispute with the government and concluded the release of ground north of portal 10, which does not form part of its 30-year mine plans. In addition, the special mining lease (SML) was successfully converted into two new mining leases, which, combined with partial relief on export levies, will enable the Zimbabwean assets to sustain and grow future financial returns

Our response

  • The Group remains committed to collaboration with all stakeholders to ensure an attractive and sustainable industry
  • We fully support the South African and Zimbabwean governments aspiration to grow and transform their mining industries
  • We continue to engage at all levels in both countries to encourages’ the growth and predictability necessary to ensure that Implats continues its significant contribution to economic growth in South Africa and Zimbabwe


Metal prices have remained muted for a protracted time. Negative sentiment related to anticipated weaker supply/demand fundamentals has been largely informed by slower diesel vehicle growth expectations, the projected rate with which the vehicle fleet could be electrified, slowing platinum jewellery sales in China and inflated perceptions of aboveground metal stocks.

For the most part of the past decade, the platinum market has been oversupplied. While sentiment towards platinum has weakened over the past five years, palladium fundamentals have strengthened significantly. Palladium is principally used to clean exhaust emissions in gasoline vehicles, which experienced strong sales growth over the period. Platinum, on the other hand, has lost market share to palladium in this key application, based on a lower palladium price and more diversified global supply.

Consensus forecasts are for softer platinum demand for at least the next three years. The immediate fundamentals for both palladium and rhodium remain strong, largely due to expected growth in the global internal combustion engine automotive market and tighter emissions regulations. In what is currently a close-to-balanced market, forecasts now see palladium and rhodium moving into relatively deep deficits sooner than previously expected.

Impact on value

  • Supply/demand fundamentals have a direct impact on metal prices and market sentiment, resulting in platinum prices remaining subdued over the past five years, with palladium prices growing strongly over the same period, particularly more recently
  • Low metal prices have a direct impact on profitability, the generation of shareholder returns and our ability to fund and grow the business into the future
  • The potential for prolonged, relatively flat platinum prices remains strong
  • Palladium, already in deficit, should continue to receive strong price support, incentivising a switch back to platinum use in the auto sector
  • Secondary supply is struggling to maintain projected growth, necessitating a drawdown from available above-ground inventories, which is anticipated to become even more pronounced in future
  • Platinum and palladium will continue to receive demand support from increasing emission regulations and growth in the global vehicle fleet in the short to medium term

Our response

  • Implats uses conservative price forecasts, given muted platinum sentiment and global risk factors
  • Group-wide cost-saving and turnaround initiatives have been implemented over the past three years
  • To sustainably improve its competitive position, profitability and financial returns, Implats has committed to a value-focused strategy. The Group intends to reduce its exposure to higher-cost and less flexible, labour intensive conventional operations to improve flexibility, capacity and sustainably generate attractive returns
  • The strategic transformation of Impala Rustenburg is designed to unleash the value of the operation, for the benefit of all stakeholders, and for the long-term sustainability of the Group
  • Market intelligence and market development initiatives are being improved
  • A maintained focus on cash conservation and strengthening the balance sheet
  • Continuing to prudently invest through the cycle, given positive longer-term fundamentals


Platinum demand declined by 3.8% during 2017 due to the declining platinum jewellery market in China and the waning diesel share of the automotive market in Western Europe.

The continued decline in the Chinese platinum jewellery market is an ongoing concern. The market continues to be in decline because of changed underlying market fundamentals. Consumer preferences have changed, while most retailers’ products and business models have not. The change in consumer preferences is hurting generic jewellery business models, yet the PGI expects long-term growth opportunities as the retailers adapt to the changing demand environment, with revised designs and collections.

Simultaneously, there is an increasing call from civil society to reduce emissions and limit public exposure to harmful gases. Cheating scandals in the automotive sector have done little to encourage public confidence in internal combustion engines and, together with the increasing cost of compliance with emission standards, pure battery electric vehicles (EVs) will soon be economically attractive, despite issues with cost, range anxiety, battery disposal and fast-charging infrastructure.

Impact on value

  • The decline in Chinese jewellery demand is one factor driving negative sentiment around platinum, affecting price and investment decisions
  • A wholesale change to different vehicle technologies will impact the demand for our metals with consequent metal price impacts
  • Pure battery EV development will have a larger impact on value
  • The impact on value from hybrid electric/internal combustion engines will be less significant

Our response

  • We continue to focus on maintaining our visibility and marketing spend in China through the PGI, focusing on platinum bridal jewellery at bridal fairs in Tier 1 cities
  • We maintain the electric vehicle market is overestimating the negative impact of powertrain electrification on platinum demand in the long term. The move towards EVs can only be answered by having a large part of the vehicle fleet as hybrid, plug-in hybrid and fuel-cell vehicles, all of which contain PGMs
  • Diesel technology remains essential to reducing global vehicle fleet greenhouse gas emissions
  • We continue to support the International Platinum Association (IPA) in their engagement with and lobbying of automotive-related policymakers and local and national governments
  • Beyond five years, we expect a growing hydrogen economy and the increasing adoption and advancement of fuel cell vehicles


Lower metal prices and rising costs over several years have had a devastating impact on the PGM industry’s profitability, triggering significant reductions in capital expenditure, as well as shaft and mine closures. Western Limb producers have been most severely impacted, driven by the costs associated with operating deep, labour-intensive, conventional mines with older infrastructure. Despite the best efforts of the PGM industry to weather the storm, the industry lost around 800 000 ounces of platinum production since 2009 due to the closure of unprofitable mines. This was particularly hard felt in the Western Limb – which accounts for 520 000 of the 800 000 lost platinum ounces per annum. Conventional producers are fundamentally restructuring loss-making operations to address cash burn and create lower-cost profitable businesses.

Anglo American Platinum (AngloPlats) was the first PGM producer to react to this changing reality, exiting high-cost conventional mining operations. This strategy, together with the continued prioritisation of its low-cost Mogalakwena operation, has proven successful enabling the recent reinstatement of dividend payments despite persistently low metal prices. As a result, AngloPlats significantly outperformed industry peers and has been leading the industry on a relative share price performance basis over one, three and five-year periods. The only other producer that has performed relatively well over this period has been Northam, largely being spared the 2012 – 2015 Rustenburg-based labour disruptions and benefiting from an aggressive low-cost, mechanised growth strategy.

Implats, together with Lonmin, have been slower to react to this changing reality and therefore Implats has been one of the poorer performers over this period.

Impact on value

  • The market has progressively raised concerns about a weakening platinum price and accelerated cash burn at Impala Rustenburg, impacting an increasingly pressurised Group balance sheet
  • Lower metal price impact on a leveraged balance sheet > The low earnings and share price decrease optionality in terms of equity financing, when required
  • Following the announcement of a strategic review of the Rustenburg operations, the market is watching for implementation risks
  • The long restructuring implementation period (two years) and weakening balance sheet continue to raise the attention of short sellers on the JSE
  • The short interest in the Company as a percentage of free float shares remains one of the highest on the exchange, indicating the market’s negative outlook on the share’s value

Our response

  • To sustainably improve its competitive position, profitability and financial returns, Implats has committed to a value-focused strategy with the intention of reducing its exposure to high-cost, labour-intensive, conventional mining operations in a challenging market and operating environment
  • The Group embarked on a radical restructuring of the Impala Rustenburg complex to creating a smaller, more focused operation, which will have six operating shafts in 2021 producing approximately 520koz platinum per year, down from the current 10 shafts ramping up to 750koz platinum per year
  • The transition will realise improved operating costs, achieving an 8.4% reduction in real terms by FY2021; reduced capital expenditure of approximately 50% as the ramp-up shafts (16 and 20) near completion and stay-in-business capital declines in line with the reduced number of shafts; and the employee complement will reduce to approximately 27 000 employees, in line with the reduced output
  • Returning Impala Rustenburg to profitability will not only improve the Group’s current financial performance but will, importantly, also contribute to a strengthened portfolio that will enhance the Group’s competitive position to create future and sustainable stakeholder value
  • It is our concerted view that a break away from the negative price outlook will only materialise once meaningful progress is demonstrated in delivering the Impala Rustenburg review outcomes


Platinum miners face heightened stakeholder expectations on a range of fronts: communities protest for economic opportunities and improved local service delivery; governments push for rapid transformation and employment creation; labour unions exert pressure for higher wages and jostle for power; while a cautious investment community maintains its call for enhanced cost efficiencies, capital management and dividends. In addition, the size of the restructuring at Impala Rustenburg means labour rationalisation is inevitable, and in this instance, may impact approximately 13 100 employment opportunities. The bulk of the anticipated labour reduction programme is aligned to the shaft closure or divestment and is phased in over the two-year implementation period.

Impact on value

  • Stakeholder expectations and our response to these have a significant impact on our legal and social licence to operate, which in turn could impact on investment decisions and the Company’s bottom line
  • The prospects of a Section 189 process increases tensions with union shop stewards and head office officials, leading to increased labour action risks
  • Retrenchments damage the trust relationship with the Department of Mineral Resources, heightening the risk of heavy-handed responses

Our response

  • We have implemented an effective stakeholder engagement strategy, to build and maintain valueenhancing relations with all key stakeholders, to create sustainable shared value and to secure a social licence to operate
  • Implats has developed supporting systems, processes, policies, and targeted engagement and communication plans to this end
  • In all cases where job loss avoidance measures are not successful, Impala Rustenburg remains committed to implementing the required changes in consultation with all its social partners to mitigate the socio-economic impacts as far as reasonably possible
  • Discussions are under way with various key stakeholders, including government and the relevant trade union representatives, in respect of this difficult but necessary transition to secure the future viability of the operation and preserve jobs


Our activities associated with the exploration, extraction and processing of Mineral Resources result in the unavoidable disturbance of land, the consumption of resources and the generation of waste and atmospheric and water pollutants. We also operate in a region afflicted by power and water shortages and an ever-increasing cost for their supply.

Impact on value

  • Scarcity of water in the region and insecurity of power supply impacts our ability to operate effectively and the increasing cost of resources has a negative impact on profitability
  • There is also an indirect impact on our social licence to operate as we share these resources with local communities
  • Growing regulatory and social pressure, increasing demands for limited natural resources and the changing costs of energy and water all highlight the business imperative of responsible environmental management

Our response

  • Implats has an environmental policy that commits the Company to conducting its exploration, mining, processing and refining operations in an environmentally responsible manner and to ensure the well-being of its stakeholders
  • The policy also commits to integrating environmental management into all aspects of the business with the aim of achieving world-class environmental performance in a sustainable manner
  • We work actively with all stakeholders to conserve natural resources
  • Measures have been taken to address security of resource supply – for example through efficiency, recycling and fuel-switching – and to actively minimise our impacts on natural resources and on the communities around our operations
  • These measures have direct benefits in terms of reduced costs and liabilities, enhanced resource security and the improved security of our licence to operate