South African miner Impala Platinum (Implats) may shut down its Canadian palladium mine two years early if metal prices remain low, the company’s CEO, Nico Muller, stated.
Muller revealed the potential closure following a 43% fall in profit in the first six months of the 2025 financial year (FY25), reported Reuters.
On a media call Muller stated: “I would not be surprised if, in the course of the next few months, we come to a position that an accelerated and responsible wind down of that operation seems to be economically the most effective way to deal with (Impala) Canada.”
The company’s profit plummeted to R1.85bn, impacted by lower metal prices, leading to the suspension of dividend payments.
Last year, Implats announced a three-year reduction in the lifespan of the Canadian mine to mitigate costs amidst declining prices.
The mine’s production dropped by 20% to 116,000 tonnes (t) in first half of FY25.
Despite the current market challenges, Muller expressed confidence in platinum group metals (PGM) prices, with a notable deficit of platinum, as well as palladium and rhodium, according to the company’s half-year presentation, reported Mining Weekly.
Muller said in the presentation: “We foresee continued demand for platinum to the extent that we see sustained deficits, and therefore continued eradication of excess surface inventory.”
He highlighted the expected rise in platinum demand, driven by the hydrogen economy and the growth of fuel cell electric vehicles.
Implats reported strong operational delivery and higher sales volumes, which were overshadowed by weaker rand PGM pricing, affecting profitability.
The company generated earnings before interest, taxes, depreciation and amortisation (EBITDA) of R6.5bn and free cash flow of R639m.
Revenue reached R42.3bn, a 3% decrease from the same period in the previous year, mainly due to lower dollar metal prices and a stronger rand, despite a 5% increase in sales volumes.
The forecast for Group capital expenditure in FY25 has been adjusted, with expected spending between R7bn and R8bn, including growth capital of between R1bn and R1.2bn.
Muller added: “Weak rand PGM pricing for much of the past year has resulted in sustained 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 downturn in PGM sector economics.
“The majority of our operations delivered well in the period under review, but residual challenges at some may require additional interventions and adjustments to future operating parameters.”
In May 2024, Implats initiated a Broad-Based Black Economic Empowerment transaction for its Rustenburg and Bafokeng assets, aligning with South Africa’s efforts to promote economic inclusion.
