LONDON (Commodity Online): Platinum miners are on a song this year with their profits scaling new heights.
This week, Impala Platinum announced that production of platinum, palladium, rhodium and other associated metals rose from 3.43 million ounces to 3.69 million ounces this year.
In addition, the latest figures show that gross platinum output in the 12 months to 30th June 2010 was up by two per cent to 1.74 million ounces.
The world's largest platinum producer also announced that refined platinum output totalled 871,000 oz, representing a year-on-year decline of eight per cent. Impala claimed that the platinum market posted a small deficit in 2009 and suggested that this trend will continue in 2010 and beyond as heavy-duty diesel demand combats a challenging supply environment. Impala Platinum currently has a number of PGM operations in both South Africa and Zimabwe.
In another development, Zimbabwe Platinum Holdings (Zimplats), Zimbabwe's largest producer of platinum, swung back to profit this year after production of platinum metal group nearly doubled.
The platinum miner, which is majority controlled by South Africa's Impala Holdings said after tax profit for the year-end to June this year soared to $122 million after posting a $25 million loss during the same time last year, making it the most profitable company operating in Zimbabwe.
The loss during the June 2008 to June 2009 period was at the height of the country's debilitating economic and political crisis after an election deadlock between President Robert Mugabe and Prime Minister Morgan Tsvangirai, who went on to form a unity government last year in February.
The company registered strong growth in turnover, which surged 236 percent to $404 million, propelled by a surge in sales of the platinum group metals, which include platinum, gold, rhodium and palladium.
Zimplats exports unrefined platinum group metals to South Africa, which has the continent's only platinum refinery.
Platinum group metals output rose to 350,000 ounces from 190,532 ounces after ore production increased significantly and together with improved metal prices resulted in strong cash generation.
Zimplats managed to shave off 11 percent on the cost of producing an ounce of platinum from the previous year, benefiting from an increase in production, the replacement of expensive open pit ore with underground mining and stringent cost controls.
Zimplats is the largest miner in the country and says it is ready to pump in a further $500 million to expand its operations but is holding out until there is clarity on the government's indigenisation policy. That will take its total investment in Zimbabwe to $1 billion.
The government earlier this year published rules demanding that foreign-owned companies should cede 51 percent of their shareholding to locals, a move that scared investors and divided the unity government.
The government later revised the law and two weeks ago named committees to recommend varying percentages of shareholding foreign-owned companies in the different sectors of the economy must transfer to locals.
Zimplats also saw a jump in operating costs for the year to $223 million, up 61 percent from 2009, as a result of ramping up production.