Impala Platinum Holdings Ltd. is looking to shift toward metals key to the green energy transition as electrification threatens its core business in southern Africa.
(Bloomberg) — Impala Platinum Holdings Ltd. is looking to shift toward metals key to the green energy transition as electrification threatens its core business in southern Africa.
Chief Executive Officer Nico Muller appointed an analyst to help the Johannesburg-based company understand the base-metals market. Copper and nickel, which Implats already produces alongside platinum-group metals, will be a particular focus, he said.
Copper is emerging as the go-to commodity for investors seeking exposure to the green transition, with usage projected to surge in electric vehicles and renewable energy. That threatens to dent demand from the main consumers of platinum and palladium: autocatalysts that curb pollution in gasoline and diesel cars and trucks.
“We do recognize the threat of electrification and as a consequence we said that we will be looking to diversify our portfolio, in particular into forward facing metals associated with renewable energy and the energy transition,” the CEO told reporters on Thursday, after profit slumped 85% in the 12 months through June.
Implats’s shift echoes the strategy followed by South African rival Sibanye Stillwater Ltd., which in recent years has diversified into nickel and lithium projects. Sibanye is also bidding for copper assets in Zambia.
Still, Muller also expressed confidence in the long-term outlook for PGMs. However, Implats faces challenges to turn around the Royal Bafokeng Platinum Ltd. operations it acquired earlier this year following a protracted takeover battle with Northam Platinum Ltd.
“Certainly, RBPlats is going to require a lot of attention in order to get the cost of operation to the position that we aspired to when we made the offer for the company,” said Muller, commenting on challenges at its Styldrift mine. Those mechanized operations were prized as key to the future profitability of adjacent Implats shafts in Rustenburg.
Implats took a one-time impairment of 6 billion rand ($321 million) for the consolidation of RBPlats. Full-year profit plunged to 4.9 billion rand, partly as a result of lower metal prices, cost inflation and additional impairments on operations in Canada.
Implats shares fell 2.1% in Johannesburg. That brought this year’s decline to 54%, making the miner the third-worst performer on the FTSE/JSE Africa All Share index.
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