THE BOTTOM LINE
Rustenburg’s one horse looks pretty much dead on its legs
Implats operations in the town lost R12.3bn this year, but the company can’t win with Amcu and Mantashe
The numbers coming out of Impala Platinum’s Rustenburg mines show the urgent need for a radical intervention – something the company is undertaking, but in the face of fierce opposition.
The Association of Mineworkers and Construction Union and the public utterances of Mineral Resources Minister Gwede Mantashe make it clear this is not going to be an easy process.
Implats intends to stop or sell five of its 11 mines around Rustenburg, with the potential loss of up to 13,000 jobs in an area where its neighbour, Lonmin, is laying off 12,600 jobs and closing old, unprofitable shafts.
Implats CEO Nico Muller stressed on Thursday the keen awareness the company’s management had for the social ramifications. It was working slowly and methodically, trying to find buyers for some of its mines where there is still a financial argument to be made to continue mining.
Stripping out the unusual items by looking at the top end of the income statement of the Rustenburg mines, it’s clear to see why management can no longer justify continuing with the suite of assets it has.
The Rustenburg mines generated a gross loss of R2.8bn, a slight improvement on the previous year’s R2.9bn loss. Once all the extra items are added, including a massive impairment of R13bn as the company starts the restructuring process, the net loss deepened to R12.3bn from a R9.9bn loss before.
It doesn’t take a financial wizard to see that the Rustenburg mines are in trouble. Threats of strikes, which would only exacerbate the problem if they lasted more than a month, and bellicose rhetoric from the ministry are all pointless.