Implats delivered a commendable performance in the first six months of FY2025, during which it concluded a Group-wide labour restructuring and adjusted the operating parameters at several of its assets – both in response to continued low rand pricing for platinum group metals (PGMs).
INTRODUCTION
Implats delivered a commendable performance in the first six months of FY2025, during which it concluded a Group-wide labour restructuring and adjusted the operating parameters at several of its assets – both in response to continued low rand pricing for platinum group metals (PGMs). Operating momentum faced headwinds: water and power interruptions were experienced in southern Africa, Zimplats navigated significant activity during project commissioning, and both Impala Rustenburg and Impala Bafokeng navigated safety stoppages following loss-of-life accidents.
The imperative to reduce fatal accidents continues to receive significant attention from Implats’ operational and corporate teams, and we remain steadfast in our commitment to improving this metric to better match the continued positive developments recorded in lost-time and total-injury rates.
Implats successfully advanced its suite of strategic mining, processing and energy projects designed to optimise operational efficiency and ensure the long-term sustainability of its mining and processing assets. Key highlights include the successful ramp-up to full power of Zimplats’ 35MW solar plant, part of a planned 185MW solar complex, and the technical completion of Zimplats’ smelter expansion and SO2 abatement project (Phase 1) and Impala Refineries’ base metals refinery (BMR) debottlenecking project.
The Group delivered an excellent environmental and sustainability performance – earning a fourth consecutive inclusion in the S&P Global Sustainability Yearbook (2025) – and, despite a challenging operating context, we continued to deliver meaningful social performance initiatives spanning infrastructure development, community wellbeing, education, skills development and inclusive procurement.
Strong operational delivery, higher sales volumes and excellent cost containment were offset by continued weakness in rand PGM pricing, which impacted Group profitability. While Implats’ reported earnings metrics declined, free cash flow generation improved, and the Group maintained a strong and flexible balance sheet.
Implats generated EBITDA of R6.5 billion, headline earnings of R1.85 billion or 206 cents per share, and recorded a free cash flow of R639 million. The Group closed the period with an adjusted net cash balance of R6.7 billion and R17.8 billion in liquidity headroom. Implats is on track to deliver previously provided production and cost guidance in FY2025.
SAFETY
Implats has intensified its efforts to cultivate a safety-first culture across all operations, including actions taken to highlight caring for your own safety, holding employees accountable and improved teamwork. Our commitment to employee safety and wellbeing is supported by robust systems and processes and through effective and proactive risk management. Eliminating fatalities and life-changing injuries are core values the Group is determined to realise, in line with our vision of achieving zero harm.
The intense focus on health, safety and employee wellbeing, and disciplined execution of our safety plan, resulted in a continued overall improvement in the Group’s safety performance. The disconnect between the steady reduction in the number of injuries and the severity of injuries, however, remains a key challenge. It is deeply disappointing that the safety interventions implemented thus far have not yet translated into a meaningful improvement in the Group’s fatality rates.
It is with tremendous regret that management reports five fatalities in four incidents at its managed operations in the period. The fatalities resulted from a fall-of-ground incident and explosives-related incident at Impala Rustenburg, and a drowning event and winch-related incident at Impala Bafokeng’s BRPM operation. The Impala board and management teams have extended their sincere condolences to those affected. Through our We Care programme, we continue to offer support to the families of the deceased: Mr Joao Jose Goma, Mr Orlando Auze Gola, Mr Fenias Boaventura Gomes, Mr Lulamile Ntamo and Mr Hilario Pedro Banze.
Due to the severity of the 11 Shaft conveyance accident that occurred in H1 FY2024, during which 13 of our colleagues tragically lost their lives, the Group’s period-on-period safety indicators are not strictly comparable. For H1 FY2025, the Group’s fatal-injury frequency rate (FIFR) improved 67% to 0.070/mmhw (H1 FY2024: 0.209).
Encouraging improvements were recorded in the Group’s lost-time injury frequency rate (LTIFR) and the total-injury frequency rate (TIFR), which improved by 29% to 3.31/mmhw and 22% to 7.10/ mmhw, respectively (H1 FY2024: 4.65 and 9.05). Excluding injuries related to the 11 Shaft accident, the LTIFR and TIFR improved by 6% and 11%, respectively.
All regulatory, third party and internal investigations into the 11 Shaft accident have been completed. The formal Department of Mineral Resources and Energy (DMRE) enquiry into the accident started in December 2024 and will continue for an estimated 12 to 18 months.
SUSTAINABILITY
Implats is committed to ensuring responsible stewardship of natural resources, leaving a lasting positive legacy in the communities in which we operate, improving the health and wellbeing of our people and eradicating occupationally acquired ill-health, while upholding the highest ethical standards. Sustainability remains a key pillar of Implats’ strategy. The Group’s sustainability activities contribute towards 14 of the United Nations’ Sustainable Development Goals (SDGs), which inform Implats’ short to medium-term strategy and underpin our goal to create long-term value for all stakeholders.
ESG ratings and recognition
Health and wellbeing
Recognising the correlation between employee health and wellbeing and the Group’s objective of zero harm, Implats prioritises mitigating the impact of the primary occupational and non-occupational health risks faced by its employees. This is achieved through active engagement with the Implats Employee Wellness Programme, which offers psychosocial support, and mental and financial wellness services. Our proactive approach extends beyond employee health, encompassing the wellbeing of the communities in which we operate. This includes outreach initiatives aimed at health and wellness education, vaccination, basic diagnostic wellness days, and facilitating access to the Group’s on-site medical facilities. Guided by global best practice, mental and financial wellness are a particular focus.
Further progress was made in managing the incidence of Implats’ primary occupational diseases. Notably, there were no new cases of silicosis among our novice mining employees. Our occupational hygiene key indicators, specifically mine dust and diesel particulate matter, continue to be effectively controlled and adhere to industry benchmarks.
Implats adopts an integrated approach to managing HIV, given its co-occurrence with tuberculosis (TB) and we continue to make progress towards the 95/95/95 principle for managing HIV infections. The goal is to ensure that 95% of employees receive awareness training and know their HIV status; 95% of those who test positive for HIV/AIDS are on antiretroviral medication; and 95% of HIV-positive employees on antiretroviral medication achieve viral suppression. The continued improvement in this programme is evident in the decrease in the new infection rate. The Group recorded a 1.3% new infection rate for H1 FY2025 (H1 FY2024: 1.5%). Our well-established TB health programme maintained the Group’s TB incidence rate three times below the industry benchmark. The current incidence rate is 161/100 000.
Noise-induced hearing loss (NIHL) remains a significant concern in the industry, and Implats has placed much emphasis on hearing protection programmes. A multi-disciplinary approach to reducing the impact of noise on hearing resulted in 26% fewer employees (31) being certified with NIHL in H1 FY2025. Implats supports the industry-wide ‘buy and maintain quiet initiative’.
By using health technology, Implats’ medical teams have enabled employees to undergo screening for non-occupational diseases. The global rise in obesity and its associated lifestyle diseases continues to be a concern. Interventions implemented include promoting healthy eating habits and increased physical activity, behavioural modification to reduce stress and weight management programmes. These interventions are conducted at our operational facilities.
Environment
Implats aims to achieve carbon neutrality by 2050, with a short-term target to reduce carbon emissions by 30% by FY2030, against FY2019 as a baseline. Excellent progress was made in increasing access to renewable energy during the six months. Zimplats commissioned the first 35MW of its intended 185MW solar power complex and, in a further positive development, the 45MW Phase 2A of the solar power project, for US$54 million, was approved in November 2024. The Group signed a five-year renewable energy supply agreement (RESA) with Discovery Green to supply wheeled wind and solar energy to its Impala Refineries operation. The RESA will supply up to 90% of Impala Refineries’ electricity needs from 2026, significantly reduce its scope 2 greenhouse gas (GHG) emissions – by more than 852 000 tonnes CO2e over the five years of the RESA – and yield cost savings.
During the period, carbon emission and energy use intensities deteriorated to 0.16CO2 tonnes per tonne milled (H1 FY2024: 0.15) and 0.80GJ per tonne milled (H1 FY2024: 0.76), respectively, largely due to the increased use of coal-based electricity at Zimplats. This was due to a prolonged drought, which reduced the availability of hydropower in Zimbabwe, the increased total energy use at Zimplats as it ramped up Furnace 2, and lower Group milled volumes at managed operations.
Given the water-scarce nature of southern Africa, several projects are ongoing to improve operational water management, security and water-use efficiencies, and provide infrastructure to ensure access to clean water for employees and mine-host communities. During the period, 58% (H1 FY2024: 54%) of water consumed at the operations was re-used or recycled water, against the FY2025 target of 56%.
There were zero major (level 5) or significant (level 4) environmental incidents and one limited-impact (level 3) incident (H1 FY2024: 0, 0 and 0, respectively). No Group operation was issued a fine or non-monetary sanction for non-compliance with environmental regulations, licences or permits.
Implats continues to support the Global Industry Standard on Tailings Management (GISTM) and retains compliance in annual independent tailings review board audits of its tailings storage facilities (TSFs).
Social
The Group’s social performance initiatives in the first half of FY2025 benefited more than 42 000 people and supported more than 3 000 employment opportunities. Our social performance framework is directed at four key focus areas – community wellbeing; education and skills development; enterprise and supplier development (ESD) and inclusive procurement; and infrastructure development.
Notable highlights include the launch of a R50 million regional ESD fund – the Impala Peo (seeds of change) fund will provide financial support to SMMEs from the mine communities surrounding the Group’s Western Limb operations. Implats was also delighted with the matric pass rates attained at the schools supported by Impala Rustenburg, Impala Bafokeng and Marula, which were higher than South African provincial and national pass rates and a testament to the efficacy of the Group’s school support programmes.
Eight community infrastructure projects were delivered, and a further seven infrastructure projects are under construction, while the Group’s ongoing agricultural support programmes reached more than 350 farmers, aiding income generation opportunities for the participants. In addition, we have strengthened our relationships with the National Prosecuting Authority, the South African Police Service and the Minerals Council as we collaborate on gender-based violence initiatives across South Africa.
GROUP OPERATIONAL REVIEW
Following Group-wide labour restructuring and changes in operating parameters at several of its assets, Implats delivered a commendable operating performance in the first half of FY2025. Unit costs benefited from strategic actions and easing input inflation, while capital expenditure was reduced as various projects were commissioned in the period.
Tonnes milled at managed operations decreased by 4% to 13.74 million tonnes, due primarily to lower throughput at Impala Canada and Marula. 6E milled grade benefited from initiatives implemented at Impala Rustenburg and improvements at Zimplats and Impala Bafokeng, rising 1% to 3.80g/t. Managed operations’ 6E volumes declined by 5% to 1.44 million ounces, mainly due to the accumulation of in-process inventory at Zimplats during the commissioning of the expanded furnace complex.
6E production from joint ventures (JVs) increased by 2% to 282 000 ounces (H1 FY2024: 276 000). Two Rivers benefited from improved operational delivery at the UG2 operations, and Mimosa delivered higher volumes despite challenges presented by intermittent regional power disruptions. 6E concentrate receipts from third parties declined by 9% to 103 000 ounces (H1 FY2024: 113 000), reflecting underlying contractual agreements.
In total, Group 6E production decreased by 4% to 1.82 million ounces (H1 FY2024: 1.90 million).
Refined 6E production, which includes saleable ounces from Impala Bafokeng and Impala Canada, increased by 2% to 1.79 million ounces (H1 FY2024: 1.75 million), benefiting from increased available processing capacity, despite intermittent interruptions to both water and power supply at Group processing facilities in the period. Implats ended H1 FY2025 with excess inventory of circa 375 000 6E ounces (H1 FY2024: 330 000; FY2024: 390 000).
In December 2024, a decision was taken to expedite the full rebuild of Furnace 3 at Impala Rustenburg, while in early February 2025, further unplanned repairs were completed at Furnace 5, resulting in constrained processing capacity in Q3 FY2025. While the commissioning of the expanded furnace complex in Zimplats offers Implats increased flexibility to navigate these events, processing constraints will slow the previously anticipated release rate of excess inventory in FY2025.
Strong cost control, easing input inflation and a lower labour complement were bolstered by rand appreciation on the translated dollar cost base of Zimplats and Impala Canada. As a result, Group unit costs per 6E ounce increased by 3% to R20 885 (H1 FY2024: R20 334).
Capital expenditure at managed operations decreased by 42% to R3.9 billion (H1 FY2024: R6.8 billion) due to lower levels of growth and replacement capital as projects neared completion and spend at Impala Canada was transferred to working costs in line with the Group’s accounting policies. Stay-in-business spend of R2.7 billion, replacement capital of R379 million and expansion capital of R905 million decreased by 18%, 73% and 58%, respectively.
Impala
Impala Rustenburg navigated safety stoppages and water-supply disruptions to deliver strong operating momentum, with production in the period at a six-year high as the operation continued to reap the benefits of specific internal interventions and prior investment in asset integrity and operational flexibility.
Total development declined by 9%, in line with the planned reduction in waste development. Mineable face length increased by 2% to 25.3 kilometres, benefiting from structural changes and process enhancements to maintain the buffer to targeted mining flexibility of circa 25 kilometres. Tonnes milled were stable at 5.40 million tonnes (H1 FY2024: 5.39 million), negatively impacted by safety stoppages and water-supply disruptions experienced in the period. The labour complement at Rustenburg was reduced, in line with the Group-wide restructuring, and tonnes milled per employee costed improved by 5%. Milled grade benefited from reduced off-reef mining and development volumes, and increased by 3% to 4.11 6E g/t. Stock-adjusted 6E production rose 2% to 687 000 ounces (H1 FY2024: 675 000). Refined volumes benefited from a drawdown in previously accumulated in-process inventory and increased by 14% to 718 000 6E ounces (H1 FY2024: 630 000).
Total cash costs, including corporate and marketing costs, increased by 6% to R14.8 billion (H1 FY2024: R13.9 billion), and stock-adjusted unit costs rose 4.5% to R21 496 per 6E ounce (H1 FY2024: R20 569).
Capital expenditure decreased by 18% to R1.3 billion (H1 FY2024: R1.6 billion) as several mining and processing projects were completed in the period and cash preservation measures were implemented. R387 million was invested in the Rustenburg smelters and Impala Refineries in Springs (H1 FY2024: R553 million) as the BMR debottlenecking was completed in the period, and work accelerated on the new Final Metals Phase 4 upgrade at the Precious Metals Refinery.
Weaker palladium and nickel pricing was compounded by rand appreciation, offsetting the benefit of 12% higher 6E sales volumes of 669 000 ounces (H1 FY2024: 596 000). Gross profit benefited from reduced depreciation and lower royalties, but declined by 15% to R815 million (H1 FY2024: R958 million), while EBITDA was maintained at R3.1 billion. Impala generated R146 million in free cash flow (H1 FY2024: R376 million) and contributed R1.3 billion to Group headline earnings (H1 FY2024: R755 million).
Impala Refining Services (IRS)
Receipts of 6E matte and concentrates from managed operations at Zimplats and Marula decreased by 13% to 380 000 ounces (H1 FY2024: 437 000), as Marula remained challenged by constrained mining flexibility and matte production at Zimplats was impeded by inventory accumulation during the commissioning of the enlarged smelter complex. 6E receipts from our JVs – Two Rivers and Mimosa – increased by 2% to 284 000 ounces (H1 FY2024: 278 000), while third-party receipts declined by 9% to 103 000 ounces (H1 FY2024: 113 000) reflecting underlying contractual agreements. In aggregate, gross 6E receipts were 7% lower at 766 000 ounces (H1 FY2024: 828 000). Refined 6E volumes decreased by 3% to 746 000 ounces (H1 FY2024: 773 000) as the Group prioritised treating higher-grade PGM concentrates.
The cash operating costs associated with smelting, refining and marketing IRS production declined by 10% to R1.0 billion, reflecting lower refined throughput and sales and the benefit of easing consumables inflation.
6E sales volumes increased by 4% to 781 000 ounces (H1 FY2024: 753 000) on limited destocking of minor PGMs. However, softer palladium and nickel pricing and rand appreciation resulted in a 5% decline in revenue. Weaker PGM pricing and lower 6E receipts were offset by higher quantities of nickel purchased, and the cost of metals purchased decreased by 1% to R15.6 billion (H1 FY2024: R15.8 billion). IRS recorded gross profit and EBITDA of R2.4 billion (H1 FY2024: R2.7 billion) and R2.1 billion (H1 FY2024: R2.9 billion), respectively, and generated R400 million in free cash flow (H1 FY2024: R122 million), while contributing R1.6 billion to Group headline earnings (H1 FY2024: R2.2 billion).
Impala Bafokeng
Revised operating parameters yielded efficiency improvements at Impala Bafokeng. Notable improvements achieved at Styldrift were offset by production losses at BRPM due to safety stoppages following the fatal accidents.
Tonnes milled were 5% lower at 2.14 million tonnes (H1 FY2024: 2.25 million), while improved process recoveries and marginally higher grades mitigated the impact on metal production, resulting in stable 6E in concentrate volumes of 254 000 ounces (H1 FY2024: 254 000). Styldrift increased 6E production by 4% to 105 000 ounces (H1 FY2024: 101 000), offsetting the 5% decline in volumes at BRPM to 146 000 ounces (H1 FY2024: 153 000).
Cash costs declined by 2% to R4.9 billion (H1 FY2024: R5.0 billion). Mining inflation of 5.8% was offset by the savings achieved through revised operating parameters, reduced corporate overheads and a lower labour complement. Unit costs decreased by 2% to R19 123 per 6E ounce in concentrate (H1 FY2024: R19 598) – with the 15% lower unit cost at Styldrift offset by a 10% increase at BRPM. Capital expenditure was reduced to R460 million (H1 FY2024: R879 million) as projects were completed in the prior period and cost-containment measures came into effect. Revenue benefited from reduced fair value movements, which offset unchanged sales volumes and a 4% decrease in received revenue per 6E ounce, while the stable cost of sales resulted in a 27% reduction in the gross loss to R464 million (H1 FY2024: R634 million).
EBITDA in the prior period was negatively impacted by several once-off costs associated with the conclusion of the Royal Bafokeng Platinum (RBPlat) acquisition and improved to R216 million (H1 FY2024: loss of R544 million), while free cash flow generation of R724 million (H1 FY2024: cash outflow R2.7 billion) benefited from an additional receipt for the sale of concentrate in the period. A headline loss of R289 million was recorded (H1 FY2024: R756 million).
Zimplats
Zimplats commissioned the expanded smelter complex resulting in a temporary accumulation of concentrate inventory. Mined and milled volumes faced headwinds from lower trackless mobile machinery availability and intermittent interruptions to the power supply.
Tonnes mined decreased by 2%, while tonnes milled declined by 3% to 3.81 million tonnes (H1 FY2024: 3.91 million). 6E milled grade increased by 1% to 3.38g/t (H1 FY2024: 3.34g/t), benefiting from increased tonnage from higher-grade areas at Rukodzi and Mupani mines, and 6E concentrate volumes declined by 2% to 325 000 ounces (H1 FY2024: 331 000). The new furnace was commissioned and optimised in the period, with hot commissioning of the expanded converters in December 2024. The build-up of concentrate inventories ahead of the commissioning was compounded by the furnace inventory build-up on the ‘first fill’ and reached 31 000 ounces, of which circa 21 500 ounces are expected to be processed to smelter matte in H2 FY2025. Matte production declined by 15% to 280 000 6E ounces (H1 FY2024: 328 000).
Total cash costs increased by 1.5% to US$275 million (H1 FY2024: US$271 million), with US dollar mining inflation of 0.2% and higher running costs associated with the expanded smelter partially offset by labour savings. Translated costs benefited from rand appreciation and were 3% lower at R4.9 billion (H1 FY2024: R5.1 billion). Unit costs per tonne milled increased by 4% to US$72 per tonne, while stock-adjusted costs per 6E ounce in matte increased by 7% to US$885 (H1 FY2024: US$829) on lower throughput and higher smelting costs.
Capital expenditure decreased by 43% to US$110 million (H1 FY2024: US$194 million) and was 45% lower in rand terms as spend on replacement and growth projects slowed. The 35MW solar plant was commissioned in August 2024 and has reached design generation capacity. The development of a 45MW solar plant – Phase 2A of the project – was approved in the period.
Sales volumes declined by 13% to 280 000 6E ounces (H1 FY2024: 320 000). Revenue per ounce sold was negatively impacted by softer palladium and nickel pricing and was 4% lower at R22 539 per 6E ounce (H1 FY2024: R23 495). Gross profit fell to R195 million (H1 FY2024: R591 million) on lower sales revenue, higher smelting costs and inventory accumulation, while the free cash outflow moderated to R729 million from R2.1 billion in the prior period as capital expenditure slowed. Zimplats recorded a headline loss of R166 million (H1 FY2024: profit of R1.5 billion).
Marula
Production at Marula was adversely impacted by constrained mining flexibility and the commissioning of an underground collision avoidance system. Leadership and operational changes were implemented to reverse the deterioration in Marula’s performance. It is well understood that a step-change is required for the operation to deliver to its potential and return to positive free cash flow generation. The asset continues to receive significant Group management oversight and support.
Tonnes milled declined by 10% to 848 000 tonnes (H1 FY2024: 945 000), and 6E grade retraced by 5% to 4.10g/t (H1 FY2024: 4.30g/t), impacted by a higher development-to-stoping ratio amid efforts to improve mining flexibility. 6E concentrate volumes declined by 10% to 101 000 ounces (H1 FY2024: 113 000).
Mining inflation eased and costs benefited from lower volumes and a reduced labour complement following restructuring, resulting in a 2% increase to R2.1 billion (H1 FY2024: R2.1 billion). Unit costs were negatively impacted by lower volumes and rose 14% to R20 998 per 6E ounce in concentrate (H1 FY2024: R18 395). Capital expenditure decreased by 27% to R196 million (H1 FY2024: R268 million) as spend on the Phase 2 project was slowed.
6E sales volumes declined by 11%, exacerbating the impact of a 6% retracement in revenue per 6E ounce to R19 650 (H1 FY2024: R20 815), and the gross loss widened to R447 million (H1 FY2024: R238 million). Marula reported negative EBITDA of R170 million (H1 FY2024: R23 million), a free cash outflow of R220 million (H1 FY2024: R100 million), and a headline loss of R274 million (H1 FY2024: profit of R274 million).
Impala Canada
Production at Impala Canada reflected the revised operating strategy implemented in FY2024 in response to the deterioration in PGM pricing. The strategy prioritises maximum volumes of high-margin ounces over the remaining life-of-mine by reducing underground mined volumes, focusing on high-grade zones and supplementing milled volumes from existing stockpiles.
Tonnes mined declined by 17%, with tonnes milled 15% lower at 1.54 million tonnes (H1 FY2024: 1.81 million), in line with the revised production plan. Milled grade decreased by 5% to 2.84g/t (H1 FY2024: 3.00g/t), resulting in a 20% decrease in 6E concentrate production to 116 000 ounces (H1 FY2024: 144 000).
Cash costs of C$156 million (H1 FY2024: C$164 million) decreased by 5% due to easing input inflation, lower mining volumes and costcontainment initiatives. Stock-adjusted unit costs per 6E ounce in concentrate increased by 15% to C$1 360 (H1 FY2024: C$1 184), while currency appreciation mitigated the increase to 8% in rand terms to R17 628 (H1 FY2024: R16 376).
6E sales volumes decreased by 19% to 115 000 ounces (H1 FY2024: 143 000) and rand revenue retraced by 14% to R18 537 per 6E ounce sold (H1 FY2024: R21 514). The 30% decline in revenue erased the benefit of a 25% improvement in the cost of sales, and the gross loss widened to R222 million (H1 FY2024: R96 million). Free cash flow improved to R187 million (H1 FY2024: cash outflow of R23 million) with the prior period's results impacted by negative final settlement adjustments. Impala Canada reported a headline loss of R311 million (H1 FY2024: R224 million).
Two Rivers
Production at Two Rivers stabilised with improved operational delivery at the UG2 operations. The Merensky project was successfully placed on care and maintenance post-commissioning of the concentrator, and a labour restructuring was completed during the period.
Tonnes milled declined by 2% to 1.79 million tonnes (H1 FY2024: 1.82 million), with higher UG2 ore volumes offsetting lower Merensky volumes. Milled grade was stable at 3.09g/t (H1 FY2024: 3.10g/t), while improved processing yields resulted in a 1% increase in 6E concentrate production to 153 000 ounces (H1 FY2024: 151 000).
Total cash costs increased by 7% to R2.4 billion (H1 FY2024: R2.2 billion), with mining inflation exacerbated by higher trackless maintenance costs and expanded UG2 production volumes. Stock-adjusted unit costs per 6E ounce in concentrate (which include the cost of the Merensky stockpile milled) increased by 7% to R16 475 per ounce (H1 FY2024: R15 464). Capital expenditure decreased by 70% to R577 million (H1 FY2024: R1.9 billion) as spend on the Merensky project slowed.
Sales volumes were stable at 153 000 6E ounces, while revenue per 6E ounce sold fell 7% to R19 888 per ounce (H1 FY2024: R21 284), impacted by weaker dollar pricing and rand appreciation. Revenue benefited from reduced fair value adjustments, while lower depreciation charges buffered the cost of sales. Gross profit declined by 11% to R314 million (H1 FY2024: R351 million). Two Rivers recorded a profit of R149 million and contributed R47 million to Group headline earnings.
Mimosa
Mimosa delivered a commendable operating performance, demonstrating strong cost containment and production gains despite a complex operating context and intermittent power interruptions.
Tonnes milled increased by 3% to 1.47 million tonnes (H1 FY2024: 1.42 million), offsetting the impact of slightly lower milled grade, which decreased by 1% to 3.61g/t (H1 FY2024: 3.63g/t), yielding a 3% improvement in 6E concentrate production of 129 000 ounces (H1 FY2024: 125 000).
Cash costs increased by 2% to US$134 million (H1 FY2024: US$131 million) and were 1% lower in rand terms, as cost-containment efforts helped counter high domestic currency inflation. Unit costs per tonne milled and per 6E ounce in concentrate were stable at US$92 (H1 FY2024: US$92) and US$1 043 (H1 FY2024: US$1 046), respectively. Capital expenditure fell by 51% to US$29 million, with spend in the prior period elevated by the TSF project – the TSF and the Gorge dam were successfully commissioned at the end of H1 FY2025.
6E sales volumes increased by 5% to 130 000 ounces, but lower received dollar pricing for platinum, palladium and nickel negatively impacted revenue per ounce, which declined by 13% to R23 294 per 6E ounce (H1 FY2024: R26 745). Revenue was buffered by fair value gains in the period and improved by 11%, while cost containment and rand appreciation resulted in a 1% improvement in the reported cost of sales. Gross profit of R43 million improved from a gross loss of R319 million in the prior period. Mimosa reported a net loss of R175 million, and the share of loss to Implats headline earnings was R135 million.
MINERAL RESOURCES AND MINERAL RESERVES
Changes in Implats’ attributable Mineral Resource and Mineral Reserve estimate were limited to production depletion in the period. Implats’ attributable Mineral Resource estimate decreased by 0.7% to 314.4 million 6E ounces and the attributable Mineral Reserve estimate decreased by 3.0% to 53.0 million 6E ounces, relative to the Group’s Mineral Resources and Mineral Reserves statement at the end of June 2024. The Mineral Resource and Mineral Reserve statement for the year ended 30 June 2025 will provide detailed updated estimates.
FINANCIAL REVIEW
Group profitability remained challenged by lacklustre rand PGM pricing. The benefit of strong operational delivery, higher sales volumes and cost containment were negated by lower revenue. While Implats’ reported earnings declined, free cash flow generation improved, and the Group maintained a strong and flexible balance sheet with closing adjusted net cash and adequate liquidity headroom.
Revenue of R42.3 billion was 3% or R1.1 billion lower than the prior comparable period:
Cost of sales was stable at R40.2 billion:
Stock-adjusted unit costs increased by 3% or R551 per 6E ounce to R20 885:
The Group generated a gross profit of R2.1 billion (H1 FY2024: R3.4 billion) at a gross profit margin of 5% (H1 FY2024: 8%).
Profit in the prior comparable period was impacted by two once-off, non-cash items relating to impairments of property, plant and equipment at each of Impala Canada and the Two Rivers JV (included in income from associates). There were no impairments in the period under review.
There was a negligible impact on earnings from net foreign exchange losses of R12 million (H1 FY2024: R255 million) and net finance costs of R29 million (H1 FY2024: net finance income of R93 million), with a period-end exchange rate of R18.90/US$ (H1 FY2024: R18.36/US$) and lower net finance income due to lower cash balances.
Other income benefited from the receipt of insurance proceeds of R434 million and fair value gains on rehabilitation investments, while in the prior comparable period, expenses were impacted by costs associated with concluding the acquisition of RBPlat. The loss from earnings at both JVs – Mimosa and Two Rivers – moderated to R87 million from R495 million in the prior period, when an impairment of R987 million (after tax) was included at Two Rivers. Implats recorded EBITDA of R6.5 billion (H1 FY2024: R8.4 billion) at an EBITDA margin of 15% (H1 FY2024: 19%).
The tax charge of R736 million resulted in an effective tax rate of 29% (H1 FY2024: R175 million and 9%). The tax rate and charge in the prior period benefited from a deferred tax credit at Zimplats.
Basic earnings increased to R1.9 billion or 208 cents per share, from R1.6 billion and 180 cents per share – profitability in the prior period was reduced by impairments. Headline earnings of R1.8 billion or 206 cents per share were 43% and 44% lower, respectively. The weighted average number of shares in issue increased to 898.05 million from 894.75 million in the prior period.
Net cash from operating activities of R3.6 billion increased from R1.3 billion – cash flow in the prior comparable period was impeded by prepayments associated with capital projects at Zimplats, a timing delay in the payment for sale of concentrates at Impala Bafokeng of R1.0 billion, and R0.9 billion in transaction costs associated with the RBPlat acquisition. In the current period, Impala Bafokeng received its June 2024 revenue payment in early July 2024, while tax refunds of R0.5 billion also benefited cash flow generation, helping counter the working capital impact of higher Group in-process and refined inventory.
Capital cash outflows declined by 44% to R3.8 billion (H1 FY2024: R6.8 billion) due to lower levels of growth and replacement capital as projects neared completion and spend at Impala Canada was transferred to working costs. Implats recorded a free cash flow of R639 million (H1 FY2024: R4.8 billion outflow). Implats received R175 million in dividends (H1 FY2024: R20 million) from JVs and associates, while dividend payments totalling R9 million were made to non-controlling interests at Impala Chrome (H1 FY2024: R304 million). The Group incurred R567 million on purchasing Implats shares for the long-term incentive plans, and a net R87 million was spent on the repayment of borrowings, resulting in a R38 million net decrease in cash.
Zimplats’ US$60 million (R1.1 billion) 12-month revolving borrowing base facility remained in use, with an additional R85 million in total short-term local currency (ZWG) accessed. Deferred revenue associated with the Impala Bafokeng gold streaming facility (R1.6 billion) and the PIC housing loan (R1.4 billion) resulted in gross closing debt of R4.1 billion, excluding R834 million in finance leases (H1 FY2024: gross debt of R3.5 billion). Closing net cash balances of R9.6 billion comprised cash and cash equivalents of R9.9 billion net of a Zimplats bank overdraft of R340 million. Due to limited recourse to Implats, the PIC loan is excluded from debt calculations for the purpose of covenants, resulting in closing adjusted debt of R2.8 billion (excluding the bank overdraft of R340 million) and closing adjusted net cash of R6.7 billion (H1 FY2024: R6.4 billion).
At the end of the period, the Group had undrawn, dual-tranche revolving credit facilities (RCFs) of R6.5 billion and US$93.8 million in place, resulting in liquidity headroom of R17.8 billion.
Implats’ capital allocation framework aims to sustain and grow meaningful value for all stakeholders and provide attractive returns to shareholders, while maintaining financial flexibility for the Group.
During the period, Implats incurred a cash outflow of R2.9 billion on stay-in-business and replacement capital, with a further R0.6 billion spent on acquiring shares for the Implats share incentive schemes. After adjusting for foreign exchange translation losses, the Group realised an adjusted free cash inflow of R1.0 billion.
The Group’s dividend policy is premised on returning a minimum of 30% of adjusted free cash flow, pre-growth capital and cash outflows. However, given constrained free cash flow generation due to persistent low PGM prices, the uncertain macroeconomic environment due to new political dispensations, and still-elevated working capital as we navigate reduced processing capacity utilisation during smelting facility repair projects, no interim dividend has been declared. The board will reassess a dividend declaration at year end. In H1 FY2025, R0.9 billion in cash was allocated to growth and investment by funding investment in expansion projects at our mining and processing operations, with residual cash flow used to fund operational and capital requirements.
PGM MARKET REVIEW (calendar years unless otherwise stated)
Negative revisions to the peer-group production profile, softer-than-expected secondary supplies and higher investment demand resulted in tighter-than-expected PGM markets in 2024. Each of platinum, palladium and rhodium are expected to remain in deficit in 2025. However, the deficits are expected to moderate, with higher forecast battery electric vehicle (BEV) penetration and a lower rate of global industrial capacity expansion expected. While primary supply is expected to be stable, secondary scrap is expected to drive gross supply gains in 2025.
Consumer and investor sentiment remains cautious. Precious metal pricing continues to be heavily influenced by the global macroeconomic outlook, with political and geopolitical developments taking centre stage. Gold and silver pricing has materially outperformed both platinum and palladium, with investor focus firmly centred on these deep and liquid markets.
The potential impact of tariffs, persistent geopolitical tensions and the increasingly divergent outlook for growth, inflation and interest rates across major economies, continue to present risks to the global macroeconomic outlook. After a year of better-than-expected outcomes, downside risks are once again being highlighted and overt optimism is cautioned.
Platinum pricing remained largely rangebound between US$900 and US$1 000 per ounce during 2024. There were limited announcements regarding supply curtailment, and the news flow on demand drivers was similarly lacklustre. Trading volumes and pricing were heavily dictated by macroeconomic headlines in the period. Rand depreciation continues to place pressure on platinum pricing, while a narrowing of the price premium to palladium has resulted in revisions to medium-term switching forecasts. Trump-administration policies, while supportive of a longer tail for catalysed vehicle production, have the potential to limit financial support for hydrogen development in the US.
Tightening market fundamentals will require a drawdown in above-ground stocks and should lend medium-term price support.
Palladium pricing continued to be negatively impacted by a confluence of factors, including the continued flow of Russian primary supply, significant speculative trading on NYMEX (the New York Mercantile Exchange) and a seeming disregard for fundamental sector news flow. While the revised production profiles at North American palladium operations led to some short covering, a lack of enacted sanctions initiated a re-loading of short positioning into year end.
Rhodium pricing was largely uneventful in 2024, stabilising after several years of significant volatility, which included steep gains and equally steep declines. Secondary scrap availability and the trading behaviour of autocat recyclers continue to heavily influence physical market liquidity, with fabricators managing the market to limit volatility and keep pricing changes to the minimum to restore confidence in industrial end users.
Automotive
The sales outlook for the global light vehicle (LV) market is for modest expansion over the medium term. Sales volumes in the key markets in 2024 were all comfortably higher on an annual basis. In the US, sales were at the best level since the pandemic, at 16 million vehicles, and Western European sales improved slightly from previous lacklustre results. China’s car market performed well as government incentives, scrappage subsidies, and strong demand for both plug-in hybrid vehicles (PHEVs) and BEVs helped aid consumer demand. In total, Global Data expects LV sales growth of 2% in 2024 and 1% in 2025.
Global Data estimates the BEV share of global LV sales reached 10.5 million units (14% of market share), representing annual growth of 13% – a significant slowing from the 30% growth delivered in 2023. It is now clear that Europe saw negligible regional BEV expansion in 2024, with North American growth of 9% also looking anaemic given the significant subsidies available to electric vehicle (EV) buyers. China remained the global driver of residual BEV expansion, with annual growth of 15% (and 60% market share) of global LV BEV sales. Globally, BEV growth was comprehensively outstripped by growth in hybrid sales including both PHEV and range-extended EVs. After a year of stagnation, BEV growth is expected to accelerate again in 2025, eroding PGM demand offtake. That said, US President Donald Trump’s commitment to roll back strict emissions legislation in the US (which effectively enforces reduced BEV market share) and remove EV tariffs could shift the profile of North American penetration. Meanwhile, changes in EU CO2 penalties proposed in 2025 could ease pressure on struggling regional OEMs to prioritise BEV sales and result in positive revisions to the catalysed LV forecast.
The pace of global LV production through 2024 softened as deeper stock management and affordability challenges in Europe and North America helped offset incentive-led output boosts in China. In aggregate, Global Data estimates LV production contracted by 1% in 2024. For 2025, the uncertainty surrounding trade tariffs and an anticipated stabilisation in demand result in a modest 1.6% forecast increase to 91.9 million units, with 2% growth pencilled in for 2026. The beginning of 2025 is marked by heightened uncertainty, and vehicle pricing will continue to play a crucial role in consumer purchasing decisions and production outcomes.
The global medium and heavy truck market is forecast to grow by around 2% in 2025 after an anticipated fall of circa 2.6% in 2024. The market remained affected by weak freight fundamentals and softer construction activity, combined with still-elevated interest rates and persistent global economic policy uncertainty. The outlook for 2025 is for mild improvement, with fiscal stimulus in both the US and China expected to boost demand, and truck production is expected to rise by 1% in 2025.
Industrial
The chemical, glass, electrical, biomedical and petroleum sectors drive industrial demand for PGMs, with annual demand impacted by capacity utilisation rates and changes in installed capacity. Industrial demand for both platinum and palladium is expected to have eased in 2024 and, while still elevated, will ease further in 2025 as the pace of capacity expansions in the chemical sector slows. Rhodium industrial demand was undercut by weak glass demand in 2022 and 2023 as alloys were adjusted on change-outs to higher platinum content in response to record pricing, and industrial demand is set to recover in the medium term as this phenomenon fades.
Platinum demand from the hydrogen economy reached circa 85 000 ounces in 2024, is expected to increase by almost 50% to 124 000 ounces in 2025, and continue a path of steady growth as the markets for electrolysis, storage and both stationary and transport fuel cells develop. At present, demand is dominated by stationary and portable fuel cell demand, but electrolysis is expected to become the market driver in the near term, before the ramp-up in both heavy and light-duty fuel cell electric vehicles drives medium and longer-term growth.
Hydrogen adoption encountered notable headwinds in the final months of 2024 – the sector faced financial pressures and tepid market momentum. Leading firms tempered investment, citing escalating costs and challenging market conditions, and high-profile projects were shelved due to funding shortfalls. Policy clarity on hydrogen imperatives and the alignment of newly formed governments should help steady the outlook over the course of 2025.
Jewellery
Platinum jewellery demand expanded modestly in 2024, with better-than-expected growth in Western, Indian and Japanese markets offsetting a further contraction in the Chinese market, where slow domestic economic growth, weak consumer sentiment and high gold pricing dampened retail sales. In Europe, a clear response to the persistent price differential of platinum versus white gold in the bridal and mass-market segments underpinned growth. In the US, normalising engagement numbers, price differentials and still-robust consumer sentiment and trade support resulted in a further expansion in platinum fabrication. India saw a rebound in demand growth as import duties on precious metals were reduced, and strong promotional efforts bolstered offtake. Some stock replenishment in China, the still-material price differential to white gold, strong structural growth in India and stable demand off an elevated base in the US should support further a moderate expansion in jewellery demand in 2025.
Investment
2024 was characterised by lacklustre investor conviction regarding the outlook for PGMs. The unfavourable economic backdrop to commodities, in general, was compounded by still-high global interest rates and a strong dollar. Speculative trading and futures positioning heavily influenced price performance in both platinum and palladium and was at odds with reported physical investment flows for both ETFs and bars and coins during the year, which increased for both metals during the period, tightening market balances.
Implats’ definition of the investment market includes ETF flows and net bar and coin purchases. In 2024, a rebound in purchasing of platinum ETFs and robust Chinese purchases of large platinum investment bars helped offset weakness in Japanese bar buying and lacklustre Western bar and coin purchases, resulting in a total net platinum investment of circa 572 000 ounces. Palladium and rhodium investment markets are far more modest in size, and the Group estimates net ETF purchases of 242 000 ounces of palladium and negligible sales of less than 1 000 ounces of rhodium, respectively, in 2024.
Supplies
PGM mine supply continues to reflect operational constraints across most key producing geographies, exacerbated by poor producer economics due to weak PGM pricing. Refined supply in 2024 was bolstered by the destocking of previously accumulated in-process inventory, while Russian output benefited from the shorter-than-expected duration of planned processing maintenance. Primary supply is expected to be stable for platinum and rhodium in 2025, but will retrace for palladium, as production profiles at North American operations were revised down in response to weak pricing.
Secondary PGM supply stabilised in 2024, but expectations for growth were trimmed through the year as collection rates again failed to rebound to the extent expected. The cost and complexity of collecting, funding and transporting spent catalyst material remains high, and there are divided opinions on the extent to which catalyst ‘hoarding’ has occurred. The pace of secondary supply expansion is a key driver of easing markets in 2025 and is premised on a recovery in both Western outturn and growth in the nascent Chinese market.
OUTLOOK
The start of 2025 has seen global markets reflect renewed bets on a stronger-for-longer dollar and higher-for-longer interest rates as the domestic growth outlook in the US has continued to improve. As the world waits for US policies under a Trump administration to unfold and settle, policymakers and central banks are being challenged to operate amid ongoing geopolitical uncertainty while facing their own domestic fiscal dynamics.
The global macroeconomic outlook faces downside risks, including those associated with the impact of tariffs and geopolitical tensions, and the outlook for growth, inflation and interest rates across the major economies is increasingly divergent.
Anecdotal evidence indicates that destocking by automotive and industrial end users of PGMs is slowing. Implats continues to receive robust requests for spot material from our customer base. In addition, a continued deferral of the expected recovery in recycling flows and secondary supply is tightening near-term market outlooks for each of platinum, palladium and rhodium. Despite these price-supportive developments, both business and investor confidence and dollar pricing remain anaemic, with a lack of conviction in the underlying demand outlook. PGM rand revenue remains rangebound, and South African producer economics are strained.
Implats remains focused on delivering safe and profitable production – operational planning and capital investment are structured to enhance the competitive positioning of each asset to maximise returns and limit the use of the balance sheet to cross-subsidise loss-making operations. Weak rand PGM pricing for much of the past year has resulted in pressure on operating margins and free cash flow potential. We have taken decisive action and continue to develop and evolve our response to the reality presented by the sharp downturn in the sector. The majority of our operations delivered well in the period under review, but the challenges at some may require additional interventions and adjustments to future operating parameters.
Guidance
Group production in FY2025 will be supported by strong delivery at Impala Rustenburg, Impala Bafokeng, Mimosa and Two Rivers, together with the expected partial unwind of accumulated inventory at Zimplats – countering the weak performance at Marula and the tapering production profile at Impala Canada. Group smelting rates in Q3 FY2025 have been constrained by required maintenance and repairs at two Impala Rustenburg furnaces, which will moderate the pace of excess inventory destocking in FY2025.
Group 6E refined and saleable production and unit cost guidance are maintained between 3.45 million and 3.65 million ounces and between R21 000 and R22 000 per 6E ounce on a stock-adjusted basis, respectively. The forecast for Group capital expenditure has been lowered, with spend at Impala Canada transferred to working costs, and is now expected to be between R7.0 billion and R8.0 billion, including growth capital of between R1.0 billion and R1.2 billion.
FY2024
guidance
FY2025
guidance
FY2025
The forecast financial information on which the above guidance is based has not been reviewed and reported on by Implats’ external auditors.