Impala Platinum chief executive officer David Brown says it will take 18 to 24 months to see an improvement in the company's production that dropped 15% to 878,000 ounces in the first half of the financial year due to insufficient training of new staff and decline projects not delivering on plan.Brown said during an interview with Mineweb this morning the company expected to produce only 1.7m ounces in the 2009 financial year from previous annual production of over 2m ounces of platinum. He said mining was unfortunately a fixed costs game and a company had to produce as much as possible to help its cost base.Implats saw a 37% increase in unit costs to R8,681 ($864) per platinum ounce in the first half on the back of lower production and ongoing inflationary pressures.Brown said Impala's production suffered in the first half of the 2009 financial year as the company underestimated the training required for new staff that were appointed amidst a high staff turnover. Impala had believed that inexperienced staff could be trained quickly and could start producing straightaway, but they have learnt that prolonged training was necessary.He said the turnover the company experienced during the mining boom has slowed dramatically and the company was now able to work with a base of people. However, it would take about six months before this work paid off.The second point is that our on-reef development at third generation shafts is not where we want it to be. Our capex decline projects have not delivered according to plan with the result that we didn't have the planned flexibility in mining our resources.Brown said a new management structure tasked with increasing on-reef development was put in place. But the chief executive said this issue would not be solved in the current financial year; it would take approximately 18-24 months before the impact of on-reef development work is seen.Brown said Implats expected its large Rustenburg mine to produce 950,000 ounces this year and production of a similar level next year, while the company has set a target of 1m to 1.1m ounces for this operation.Implats will see an improvement in its production to 1.85m ounces in 2010 from its net decrease in production this year. By this time Two Rivers will be in full production of 120,000 ounces, Zimplats will produce 18,000 ounces and Mimosa 100,000 ounces. The company's Marula mine will reach production of 120,000 ounces by 2011.REPOSITIONING FOR UPTURN
Implats is currently repositioning the company financially for an expected upturn in the platinum market by 2010. Brown said this involved the alignment of its costs that rose steeply with lower output from the company in the first half of the financial year. We effectively have to improve margins so we can benefit once the metals prices improve, he said.The company is also focusing on preserving cash over the next 18 to 24 months in order to be in a position to expand when the market allows it.Brown indicated the company's ambitions to overtake Anglo Platinum as the world's largest platinum producer was on the backburner for now as extra supply would be superfluous in the current environment.We are repositioning the company over the next 18-24 months and then we can grow again.FINANCIALS
Impala today announced a 14% rise in headline earnings to R8.77 per share for the first half of 2009 and an interim dividend of R1.20 (0,11UScent) per share. The company has cut its capex programme by R10bn ($994m) to R13bn ($1.29bn) for the four years up to 2013.It said both the Marula Merensky and Leeuwkop projects have been deferred.