How we create value

Implats is one of the world’s leading producers of platinum and associated platinum group metals (PGMs). Implats is structured around five mining operations and IRS, a toll refining business. Our operations are located on the Bushveld Complex in South Africa and the Great Dyke in Zimbabwe, the two most significant PGM-bearing ore bodies in the world.

Performance linked to stakeholder needs

Implats measures its performance by identifying its stakeholders and their legitimate material issues and what must be done to address these needs.

Chairman’s report

The continued combination of tough market, operating, economic and social conditions has rightly spurred Implats towards a fundamental review of aspects of our business model.

About Implats

Our operations

Implats contributes around one-quarter of global platinum output.


FIFR 0.102
TIFR 14.15
Refined Pt production 626 900 oz
Headline loss R1 288 million
Net cash from operating activities R1 293 million
Capital expenditure R2 490 million
Attributable Pt ounces 54.5Moz (Mineral Resources)
Number of employees 40 477

Impala, Implats’ 96% owned primary operational unit, has operations situated on the western limb of the world-renowned Bushveld Complex near Rustenburg in South Africa. This operation comprises a 13 shaft mining complex and concentrating and smelting plants. The base and precious metal refineries are situated in Springs, east of Johannesburg.


FIFR nil
TIFR 20.3
Pt production 77 700 oz*
Headline loss R468 million
Net cash from operating activities R463 million
Capital expenditure R89 million
Attributable Pt ounces 7.9Moz (Mineral Resources)
Number of employees 43 838

Marula is 73% owned by Implats and is one of the first operations to have been developed on the relatively under-exploited eastern limb of the Bushveld Complex in South Africa. Marula is located in the Limpopo province, some 50 kilometres north west of Burgersfort.

* In concentrate

Two Rivers*

Pt production 185 900 oz**
Attributable Pt ounces 12.3Moz (Mineral Resources)

Two Rivers is a joint venture between African Rainbow Minerals (51%) and Implats (49%). The operation is situated on the southern part of the eastern limb of the Bushveld Igneous Complex some 35 kilometres south-west of Burgersfort in Mpumalanga, South Africa.

* Non-managed

** In concentrate


Refined Pt production 811 500 oz
Headline earnings R1 434 million
Net cash from operating activities R368 million

South Africa


FIFR nil
TIFR 1.01
Pt production 289 800 oz*
Headline earnings R102 million
Net cash from operating activities R1 567 million
Capital expenditure R981 million
Attributable Pt ounces 94.8Moz (Mineral Resources)
Number of employees 5 443

Zimplats is 87% owned by Implats and its operations are situated on the Zimbabwean Great Dyke south-west of Harare. Zimplats operates four underground mines and a concentrator at Ngezi. The Selous Metallurgical Complex (SMC), located some 77 kilometres north of the underground operations, comprises a concentrator and a smelter.

* In matte


FIFR 0.246
TIFR 1.97
Pt production 119 700 oz**
Attributable Pt ounces 3.6Moz (Mineral Resources)

Mimosa is jointly held by Implats and Sibanye. Its operations are located on the Wedza Geological Complex on the Zimbabwean Great Dyke, 150 kilometres east of Bulawayo. The operation comprises a shallow underground mine, accessed by a decline shaft, and a concentrator.

* Non-managed

* In concentrate


Implats refined 1 438 300 oz

Group refined platinum production

Mine-to-market operations

Impala – 626 900 oz*
Zimplas – 251 000 oz
Impala – 626 900 oz
Impala – 626 900 oz
Impala – 626 900 oz

Impala refining services (IRS)

Third-party concentrate purchase contracts and toll treatment – 182 900 oz

Refined platinum ounces have been rounded for illustrative purposes.

* Ex-Impala Refining Services (IRS)


FIFR 0.091
TIFR 12.31
Refined Pt production 1 438 300 oz
Headline earnings R83 million
Net cash from operating activities R2 731 million
Capital expenditure R3 560 million
Attributable Pt ounces 194Moz (mineral resources)
Number of employees 50 720

PGMs are a relatively rare commodity – only around 500 tonnes (excluding recycling) are produced annually, of which less than 230 tonnes are platinum – yet they play a progressively more important role in everyday life, such as autocatalysts to control vehicle emissions, in the production of LCD glass and as hardeners in dental alloy. PGMs – primarily platinum, and the associated by-products, palladium, rhodium, ruthenium, iridium and gold usually occur in association with nickel and copper.

Group performance

Chief executive officer’s review

Terence Goodlace
Chief executive officer

Implats will continue its cash preservation initiatives as well as the drive to enhance productivity and profitability. The group continues to invest in its operations and will mechanise and optimise through the downturn to ensure it is well positioned for the future.

Has the team managed to create a safe production environment in 2016?

Safety has improved considerably in recent years. During the first half of this financial year the Group achieved its lowest ever 12-month moving average fatal-injury frequency rate of 0.024 per million man hours worked. Between 13 April 2015 and 24 November 2015 the South African operations reported zero fatal incidents resulting in 210 fatality-free calendar days, which equates to over eight million fatality-free shifts - a truly remarkable performance.

Other noteworthy achievements include Rustenburg Services, which has worked more than 11 million shifts without a fatal incident, Zimplats with more than five million and Two Rivers with three million. Marula and Impala’s 4, 11 and 20 Shafts have each worked more than two million shifts without incident. Other safety millionaires include 6, 7, 10 and 16 Shafts and Mineral Processing.

Despite this improvement, the achievements were overshadowed by the tragic loss of 11 lives at our operations during the year - two at Mimosa in Zimbabwe, three at Impala Rustenburg’s 1 Shaft and six at 14 Shaft. Losing colleagues is a devastating blow that reverberates across the Group and we extend our sincere condolences to their families and friends. The incidents at Mimosa and 14 and 1 Shafts were unprecedented and unusual - despite all our programmes to drive zero harm - and has brought into stark focus the risks around critical safety behaviours and the need to inculcate an independent safety culture and attitude in every single employee.

We continue to work closely with all stakeholders including our own employees, organised labour and the Department of Mineral Resources (DMR) in pursuit of achieving safe production and zero harm across all operations.

Good progress has been made in advancing safety improvements across all the pillars of our safety strategy, namely person and behaviour, safety practices and the safety environment, particularly in terms of new technology and engineering solutions and systems.

However, our analysis of the fatal and lost-time injuries has shown that human failure remains a significant factor in these incidents and our focus emphasises improvements to the person and behavioural pillars in particular. This is about ensuring employees have the right skills, team work, intelligence, knowledge, motivation, attitudes and abilities to achieve zero harm. We are striving to shift our safety culture from one of dependence on supervision to ensure compliance with safety rules and procedures, to an interdependent culture where all employees look after their own and others’ safety. This has and will continue to entail the urgent roll out of safe production rules and critical safety behaviours, health and safety leadership assessments, supervisory leadership training courses, safety representative training and further team mobilisation. More than half of all production teams have been through the team mobilisation training over the past two years and we aim to continue this invaluable five-day training course at a rate of five teams per week.

What were the key features of this year’s performance?

The platinum sector continues to be challenged by a low dollar PGM price environment. Implats’ proactive response plan to the lower-for-longer PGM price scenario, introduced in February 2015, has shown positive results during the year and the group continues to prioritise shorter-term cash preservation and profitability enhancement measures. In addition, Implats’ balance sheet was strengthened through a successful R4 billion equity-raising exercise, the proceeds of which are ear-marked for completing the 16 and 20 Shaft complexes in Rustenburg. Subsequent to the year end the Group also extended the quantum and tenure of its existing debt facilities to provide further flexibility.

The diverse geographical nature and scope of the Group’s assets are becoming ever-more advantageous to its operating profile and operational performances improved across the Group. Zimplats, Mimosa, Marula and Two Rivers all achieved their best ever output and operational performances. Zimplats restored platinum output to design capacity following successful open-pit mining and the build-up of mechanised production from the Bimha mine. Production at Marula during the first half of the year improved by 13%. However, the second half was disrupted by sporadic community unrest, which affected tonnages and ounces. The operation continues to perform well and, in the last two months of the financial year, which were uninterrupted, Marula achieved efficiencies that would achieve the targeted 90 000 ounces of platinum on an annualised basis.

Impala Rustenburg managed a reasonable performance in the first half of the year, but two major safety incidents affected its overall performance. A conveyor belt fire at the 14 Shaft complex resulted in the loss of productive capacity from the bottom trackless section of the mine. Full productive capacity will be restored in March 2017 when all rehabilitation activities are completed. It is planned to commence trackless mining from this section from November 2016 as and when conveyor and associated ancillary services are restored. Meanwhile, the fall-of-ground incident at 1 Shaft and the subsequent search for the missing employees resulted in multiple safety interruptions.

Implats remains cash generative, ending the period under review with R2 731 million free cash from operations, despite operating in a period when rand metal prices were low. The South African operations were cash positive, after taking into account capital expenditure on 16 and 20 shaft, this performance was assisted by the considerable financial contribution from Impala Refining Services (IRS).

How has your approach to stakeholder engagement changed over the years?

Direct engagement with employees, communities and other key stakeholders has been a key focus during the year and we are continuously stepping up our engagement. We value our stakeholders - we listen carefully to and prioritise their needs. We aim to match these developmental needs with the resources available to us. The current reality, however, is that the needs far outstrip our available resources.

There is growing social discontent and a crisis of expectations is emerging, particularly in communities surrounding mining sector activity, with devastating consequences. This year Implats has seen much higher levels of violent community unrest and demonstrations that have led to mineworker intimidation, production interruptions and damage to mine infrastructure.

At the heart of this crisis is an information and trust breakdown between mining companies and their key stakeholders. To reclaim trust and goodwill, it is vital that mining companies secure new and innovative ways to engage more effectively and proactively with key stakeholders.

That said, the platinum belt strikes three years ago exposed fault lines that allowed the sector to engage and collectively solve pressing challenges. Implats’ relations with labour, in particular, is a lot sounder and more advanced than before and the trust relationship is much improved. It is vital that Implats continues to share information and create an environment where stakeholders are informed, feel valued and are able to collaborate with company representatives.

In an environment where violence and protest action have often made it difficult to engage stakeholders directly, new communication channels and technology need to be incorporated to augment more traditional strategies to engage with large, diverse, widely-distributed and often politicised and/or radicalised stakeholder groups.

We have structured and prioritised strategic stakeholder engagement and communication actions and projects across the group, based on internal stakeholder mapping and risk assessment intelligence.

Has Implats’ response plan to the low PGM price environment borne fruit?

The response plan is showing positive results. First communicated in February 2015, Implats’ response plan targeted savings of R930 million in the 2016 financial year. The key strategic objectives included cost optimisation, reprioritising and rescheduling of capital expenditure, implementing the Impala Lease Area strategy and strengthening the group balance sheet.

Various initiatives to improve mining efficiencies and reduce operating costs realised a saving of approximately R1.4 billion for the year, of which R0.9 was realised at Impala. Key components included: R286 million as a result of reduced staffing; R306 million as a result of contract renegotiations and improved consumption; R97 million on reduced overtime; and R241 million on higher efficiencies, deferred development and renewals.

Our capital budget was reduced by R1.3 billion to R4.2  billion for 2016 following further curtailments at 17 Shaft and targeted reductions at Impala Rustenburg, Marula and Zimplats. Over the year, R1.3 billion was spent on 16 and 20 Shafts and R981 million at Zimplats. R3.56 billion capital has been spent across the group, resulting in a R1.9 billion deferment on capital expenditure.

Once the Impala Lease Area strategy has been fully implemented, the lease area will have transformed into a more concentrated mining operation with access to new, modern shaft complexes making better use of the invested fixed cost base, with higher mining efficiencies and lower unit costs. Both 8 Shaft and the 12 Shaft mechanised sections were closed as planned in 2016. As at year end, overall labour numbers at Impala Rustenburg were reduced by approximately 3 360 people through the planned closures of these operations, initiatives targeting contractor efficiencies and labour optimisation through natural attrition. In addition, contractor employment has reduced from 11 302 to 9 531 and own employees from 32 536 to 30 946 – job losses have been mitigated as far as possible by transfers to 16 and 20. Shafts and the reclassification of employees to other occupations.

In terms of the balance sheet, group debt facilities were increased in February 2016 from R3.5 billion to R4.0 billion available until December 2017. Subsequent to year end the Group amended R3.25 billion of these facilities to a revised quantum of R4.0 billion available until 2021. The enhanced liquidity will enable Implats to address upcoming debt maturities as well as the ongoing needs of the business. The R4 billion equity‐raising successfully completed in October 2015 is being spent to complete 16 and 20 Shafts.

What are the opportunities and focus areas for Implats going forward?

The forecast for fundamental deficits in PGMs over the medium to long‐term will have a positive effect on PGM prices given the challenges constraining primary supply. In the short term, however, PGM prices are expected to remain subdued, largely due to the uncertain global economic outlook and prevailing negative sentiment on most resources in general - and particularly due to the slowing Chinese economy.

Implats will continue its cash preservation initiatives as well as the drive to enhance productivity and profitability. The Group continues to invest in its operations and will mechanise and optimise through the downturn to ensure that it is well positioned for the future. All operations are performing extremely well and efforts are apace to restore Impala Rustenburg to its full potential.

Implats remains resolute in achieving zero harm goals to ensure the safety and well‐being of every employee. Following the fire at Impala Rustenburg’s 14 Shaft, the upper conventional section of the mine has been reopened. The lower trackless and conventional mining sections remain closed and mining crews have been re-deployed. The repair plan to return the shaft to full production is expected to be completed by March 2017. This had a 39 000 platinum ounce production impact in 2016 and is expected to have a further 45 000 impact in 2017. Production estimate for Impala is between 700 000 and 710 000 platinum ounces for 2017, after which the previous guidance of building up to 830 000 platinum ounces by 2020 remains.

Production guidance for the other operations remains unchanged for the coming year - Zimplats 260 000 platinum ounces in matte and Marula, Two Rivers and Mimosa 90 000, 175 000 and 115 000 platinum ounces in concentrate respectively.

Unit costs are expected to be approximately R21 300 per platinum ounces and capital should be contained to R4.4 billion in 2017.

The challenging economic, operational and social framework in which we operate serves to highlight the importance of maintaining a strong focus on the sustainability of our business and delivering on our commitment to the safe and responsible production of PGMs, while making a meaningful contribution to our communities. An ethos of respect and care in the way we do business is integral to realising our vision of being the world’s best platinum-producing company that delivers superior returns to all our stakeholders.

This is your last year-end statement to Implats’ shareholders.

Yes, I have given notice of my decision to resign with effect from 1 December 2016. I chose, in close consultation with the Group Chairman, to give a long notice period to allow for a seamless and smooth hand-over period.

I will spend my last six months at Implats leading the ongoing implementation of all of our safety initiatives as well as the response plan to ensure that it continues to make good progress and that the Group emerges more resilient and robust from the difficult trading and operating environment. I leave behind a strong board and an experienced executive team to lead this process to its conclusion.

I wish to thank shareholders for their continuing support and express my deepest gratitude to every single one of our employees who give of their best - day in and day out. Implats is not in the business of mining - but rather, with such a large workforce, we are in the business of people. Now, more than ever, we need to focus on our people.

Chief financial officer’s review

During the year under review, the group has continued to focus on cost reduction and strengthening the balance sheet to ensure sustainability and the completion of key capital projects respectively.

Financial summary and statistics
Summary statement of comprehensive income for the year ended 30 June 2016
Revenue 35 932 32 477
Less: Cost of sales (35 928) (30 849)
Gross (loss)/profit 4 1 628
Other operating income 647 953
Other operating expenses (198) (1 338)
Impairment (307) (5 847)
Royalty (expense)/income (516) 575
Loss from operations (370) (4 029)
Other (230) (327)
Income tax 557 217
Loss for the period (43) (4 139)
Other comprehensive income    
Other (11) (10)
Exchange differences on translation 2 380 1 495
Total comprehensive income 2 326 (2 654)
Headline earnings (cps) 12 36
  • Revenue (Rm) (Volume/price/exchange)

  • Cost of sales (Rbn)
  • Other operating expenses

    Other operating expenses were higher in the previous year due to R808 million being transferred from cost of sales due to it being non-production costs incurred during the ramp-up after the strike and higher asset scrapping in 2015.

  • Impairment

    In 2015 the R5.8 billion impairment charge related to 17 Shaft, Afplats and Imbasa/Inkosi. Impairments in the current year relate mainly to the 12 shaft (mechanised) section which was shut before the half year.

  • Royalty

    In 2015, the royalties were affected by the Zimplats court case, which resulted in a credit of R1.2 billion in that year.

  • Income tax

    The tax shield was impacted by R509 million prior year adjustment for the deductibility of the previously written off amount due by A1.

Consolidated statement of cash flow for the year ended 30 June 2016
Cash flow from operating activities 2 731 2 328
Cash flow from investing activities (2 920) (3 845)
Cash flow from financing activities 4 215 (276)
Cash and cash equivalents – end of year 6 788 2 597
Net cash/(debt) excluding leases 19 (3 464)
Cash spend (%)
  • Gross cash and cash equivalents (Rm)

Equity raising

During the year under review, the group has continued to focus on cost reduction and strengthening the balance sheet to ensure sustainability and the completion of key capital projects respectively.

To secure the key capital projects at Impala, the group successfully executed a R4.0 billion equity raising in October 2015 via an accelerated book build process.

In addition, subsequent to the year end the group extended the quantum and tenure of its existing debt facilities from certain of its local relationship banking institutions in order to further strengthen its balance sheet.

Implats has amended R3.25 billion of its existing debt facilities, which were previously available until December 2017, to a revised quantum of R4.0 billion available until 2021. All other debt facilities remain in place. The enhanced liquidity provides comfort that Implats is able to address upcoming debt maturities as well as the ongoing needs of the business.

  • Net cash (Rm)

*Net of cross currency interest rate swap.

Board profiles

Mandla Gantsho 54 – Chairman

Independent non-executive director BCom (Hons), CTA, CA(SA), MSc, MPhil, PhD

  • Appointed in November 2010. Held senior executive positions in public and private sector organisations, including vice-president for infrastructure at the African Development Bank, CEO and MD of the Development Bank of Southern Africa. A former non-executive director of the SARB. Currently the chairman of Africa Rising Capital, Sasol Limited and Ithala Development Finance Corporation.

Peter Davey 63 (British)

Independent non-executive director BSc (Hons) Mining Engineering

  • Appointed to the board in July 2013 as an independent non-executive director. He was previously a resource analyst at various investment banks in the United Kingdom and he also has extensive production experience in the South African gold and platinum mining industry.

Hugh Cameron 65

Independent non-executive director BCom, BAcc, CA(SA)

  • Appointed to the board in November 2010 as an independent non-executive director and he was previously a partner at PricewaterhouseCoopers where he specialised in mining and headed up their global mining practice for a number of years. He is a director of Calgro M3 Holdings and a trustee of the Sishen Iron Ore Company Community Development Trust.

Alastair Macfarlane 65 (British)

Independent non-executive director MSc Mining Engineering

  • Appointed in December 2012. Extensive experience in senior and executive management positions in the mining industry, consults to many mining companies within the sector locally and internationally. Is a visiting senior lecturer at the University of the Witwatersrand; is chairman of the South African Mineral Asset Valuation Committee (SAMVAL) and chairs the international Mineral Asset Valuation Committee (IMVAL).

Babalwa Ngonyama 41

Independent non-executive director BCompt (Hons), CA(SA), MBA

  • Appointed in November 2010. She is the founding chairman of the African Women Chartered Accountants (AWCA). She is CEO of Sinayo Securities and also serves as a non-executive director on the boards of Barloworld Limited, Hollard Life Assurance Company, Clover Industries Limited, Group Five Limited and Aspen Pharmacare Holdings.

Nkosana Moyo 65 (Zimbabwean)

Independent non-executive director BSc (Hons)Physics, MBA, PhD

  • Appointed in March 2015. Previous Vice-President and COO of the African Development Bank. He was the managing partner for Actis in Africa and he was also senior adviser and associate for the International Finance Corporation. He is currently an independent nonexecutive director Old Mutual PLC.

Mpho Nkeli 51

Independent non-executive director BSc Environmental Studies, MBA

  • Appointed in April 2015. Previously director of Alexander Forbes, Vodacom SA, African Bank and Chairperson of the Commission for Employment Equity. She is currently a director of Search Partners International, she is an independent non-executive director of Life Healthcare.

Sydney Mufamadi 57

Independent non-executive director MSc and PhD Oriental and African Studies

  • Appointed in March 2015. Director of various subsidiary boards of Barclays Bank Africa Group in Mozambique and Tanzania, director of the School of Leadership at the University of Johannesburg. Chairman of Zimplats Holdings Ltd.

Bernard Swanepoel 55

Independent non-executive director BSc Mining Engineering and BCom (Hons)

  • Appointed in March 2015. Non-executive chairman of Village Main Reef, and serves as a non-executive director of Sanlam and African Rainbow Minerals.

Albertinah Kekana 43

Non-executive director BCom, Higher Diploma in accounting, CA(SA)

  • Appointed in August 2013 as a non-executive director representing Royal Bafokeng Holdings (Pty) Limited (RBH). Currently CEO of RBH and serves as a non-executive director of RMB Holdings Limited and a non-executive director of Rand Merchant Insurance Holdings Limited.

Terence Goodlace 57

Executive director NHD Metalliferous Mining, BCom, MBA

  • Appointed to the board in August 2010. Former chief executive officer of Metorex Limited. Joined the board as an independent non-executive director and was appointed CEO on 1 June 2012. He is an independent non-executive director of Gold Fields Limited.

Brenda Berlin 51

Executive director BCom, BAcc CA(SA)

  • Appointed to the board in February 2011. Joined the Company in 2004 as commercial executive before being appointed as Group chief financial officer.