Integrated Annual Report 2015
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Business Model 
Operational review – Impala Refining Services

“IRS uses Impala’s excess processing and refining capacity to smelt and refine concentrate and matte produced by the Group’s other operations and third parties

 

IRS uses Impala’s excess processing and refining capacity to smelt and refine the concentrate and matte produced by the Group’s other operations and third parties. The business also does ad hoc toll refining.

Manufactured capital

Platinum production from mine-to-market operations decreased by 1.2% from the previous year to 567 500 (2014: 574 700) ounces, mainly due to the lower volumes from Zimplats following the temporary closure of the Bimha Mine, as well as the industrial action and safety stoppages experienced at Marula. This was offset to some extent by increased production from Mimosa.

Refined platinum production from third-party purchases, recycling and toll volumes decreased from 192 300 to 133 200 ounces, largely due to the once-off treatment of Northam concentrate in the previous comparable period.

(’000oz)  2015   2014  
Zimplats   215.6   226.3  
Marula   70.5   76.8  
Mimosa   113.2   103.3  
Two Rivers   168.2   168.3  
Mine-to-market operations   567.5   574.7  
Third-party purchases and toll   133.2   192.3  
Grand total   700.7   767.0  

Outlook

Access to spare smelting and refining capacity from Impala positions IRS well to process additional material from new customers. Opportunities in this regard are continuously evaluated.  

Impala Refining Services – key statistics

    2015   2014   2013   2012   2011  
Sales   (Rm)  18 824   18 495   14 696   14 069   14 273  
Platinum       10 016   10 389   8 481   7 982   8 104  
Palladium       4 491   4 035   2 675   2 464   2 169  
Rhodium       1 173   959   794   1 113   1 376  
Nickel       1 559   1 390   1 164   1 236   1 305  
Other       1 585   1 722   1 582   1 274   1 319  
Cost of sales   (Rm)  (17 303)  (16 794)  (13 287)  (12 730)  (12 860) 
Metals purchased       (15 840)  (16 665)  (12 926)  (12 147)  (12 649) 
Smelting       (327)  (308)  (297)  (225)  (232) 
Refining       (471)  (450)  (399)  (378)  (366) 
Selling and administration       (34)  (31)  (37)  (37)  (30) 
Change in metal inventories       (631)  660   372   57   417  
Gross profit IRS   (Rm)  1 521   1 701   1 409   1 339   1 413  
Metals purchased – adjustment on metal prices and exchange rates*   (Rm)  (580)  244   177   (195)  (20) 
Inventory – adjustment for metal prices and exchange rates   (Rm)  352   (132)  (189)  191   (4) 
Gross profit in Implats Group   (Rm)  1 293   1 813   1 397   1 335   1 389  
Metals purchased – fair value on metal prices   (Rm)  741   (246)  93   511   (123) 
Metals purchased – foreign exchange adjustments   (Rm)  (162)  2   (270)  (316)  143  
Gross margin   (%)  8.1   9.2   9.6   9.5   10.1  
Revenue   (Rm)  18 824   18 495   14 696   14 069   14 273  
Direct sales to customers       43   34   111   116   401  
Sales to Impala       18 327   17 935   14 139   13 702   13 427  
Treatment income – external       450   521   442   248   442  
Treatment income – intercompany       4   5   4   3   3  
Total sales volumes                          
Platinum   (’000oz)  696.4   707.1   629.8   638.2   684.2  
Palladium   (’000oz)  493.9   527.1   460.5   468.3   474.2  
Rhodium   (’000oz)  90.6   94.4   82.5   94.1   87.1  
Nickel   (t)  8 756   9 195   8 095   8 209   7 863  
Prices achieved                          
Platinum   (US$/oz)  1 278   1 427   1 532   1 634   1 691  
Palladium   (US$/oz)  807   742   659   689   655  
Rhodium   (US$/oz)  1 145   982   1 099   1 549   2 254  
Nickel   (US$/t)  15 884   14 702   16 314   19 723   23 757  
Exchange rate achieved   (R/US$)  11.26   10.30   8.79   7.65   7.00  
Refined production                          
Platinum   (’000oz)  700.7   767.0   872.3   697.5   895.1  
Palladium   (’000oz)  511.3   513.0   669.8   541.1   680.6  
Rhodium   (’000oz)  94.7   107.3   118.4   111.0   134.8  
Nickel   (t)  12 320   11 939   11 983   10 582   10 829  
PGM refined production   (’000oz)  1 480.8   1 604.5   1 854.9   1 527.9   1 918.2  
Metal returned                          
Platinum   (’000oz)  –   94.5   188.6   120.7   219.5  
Palladium   (’000oz)  0.5   28.2   190.0   147.5   210.0  
Rhodium   (’000oz)  –   9.0   35.5   24.8   41.7  
Nickel   (t)  3 344   3 186   3 193   3 093   3 370  
* Adjustments on metal prices and exchange rates have been reallocated to gross profit from other income and expense and foreign exchange profit or loss respectively in the statement of comprehensive income.