Dear stakeholder
Reflecting on Implats' performance over the last year, this is
undeniably both a challenging and an exciting time to be in
the platinum industry. Following on the positive signs of
global recovery at the beginning of 2010, commodity
markets appeared to be poised on the cusp of sustained
recovery. However, the European debt crisis could see the
global economy staring a double-dip recession in the face.
Despite this, recovering vehicle sales, increasing investment
in exchange-traded funds (ETFs) and a firmer jewellery
market augur well for the market for platinum and palladium.
In this, my first letter to you, I have to acknowledge that this
has been one of the toughest years we have yet faced, both
in terms of economic recession as well as the various
internal issues currently confronting us. Despite this, our
management team under the leadership of David Brown has
guided the organisation with remarkable dexterity over the
last year. I extend my thanks and appreciation to all of them
for a remarkable effort in extremely trying circumstances.
It is with great sadness that we report that 15 of our
employees lost their lives at work during this period, nine
of them in the fall-of-ground incident at 14 Shaft in July last
year. Both the Board and management team extend our
sincere sympathies and condolences to the families,
friends and colleagues of those who died.
The safety of our employees remains our key priority and,
in the light of a disappointing safety performance,
particularly at Impala Rustenburg and Marula, we have
engaged with Du Pont to objectively benchmark our
current safety management practices against world-class
best safety practices. The results were enlightening and it
is evident that our safety culture is a 'dependent' one
where our employees still require high levels of supervision
in the work situation. As such, the designs of future
interventions will take this into account.
Our resolve to create safe working environments remains
undiminished and is the focus of our commitment to 'zero
harm' in the longer term. To this end, the issue of zero
tolerance around non-compliance is non-negotiable, while
we continue promoting and creating an embedded safety
culture through better and more frequent training and improved communications throughout the organisation.
Visible leadership, however, remains the key to driving
home a safety culture within every employee.
Long-term sustainability and the concept of sustainable
development have become vital aspects of our business,
both of which we have embraced. It is an area that has
become more complex and more regulated over time and
this report is our first attempt to report back to our
stakeholders in an integrated manner giving due attention to
the social, economic and environmental considerations that
will have a bearing on the future of this Company. We remain
vigilant in minimising the negative impacts in these areas.
The strike during August and September 2009 was
unfortunate and exposed some significant relationship
issues between our employees, elected union officials and
management. We are currently working hard on
strengthening our relationships with all our stakeholders.
The acknowledgement and reward of every individual's
contribution to our business is an essential element in the
creation of a successful and motivated team.
We recognise the importance of developing our people
and work in this area continues unabated. Skills, however,
remain a scarce commodity and we continue to invest in
manpower by attracting, retaining and developing talented
individuals in order to ensure operational efficiency and the
capacity for operational expansion when necessary. Our
ability to do so is further complicated by the maturing HIV/
Aids epidemic as well as pulmonary TB infections with
impacts on both safety and production performances.
This has been a tough financial year for Implats. However,
despite the difficult conditions, we have not defaulted on
dividends, and payments were maintained throughout the
economic downturn albeit based on the quantum of cash
available rather than on a cover basis. Your Company
remains financially sound with a relatively ungeared balance
sheet and is well placed in the current environment to take
advantage of the expected upturn.
Meeting our production target of 2.1 million ounces of
platinum by 2014 remains a key focus and is premised on
safe, efficient production in terms of volumes, grades
and cost containment. Efficient and effective utilisation of
resources remains key to sustain our revenue stream
and profitability.
The focus at Impala Rustenburg remains on the restoration
of the one million platinum ounce production profile over
the next four years. The impact on output of both the
14 Shaft incident and industrial action at the beginning of
the year was disappointing. However, the current rates of
on-reef development at the major Merensky shafts are
pleasing and indicative that the recovery of this operation
is under way. The Board nevertheless remains anxious that
further setbacks with our capital projects be eliminated as
these will seriously undermine our ability to reach our
targets timeously. We look forward to the first production
from 20 Shaft, scheduled for the coming year.
Despite Marula management's best endeavours during
2010, the results have not been forthcoming. The Board
will be looking forward to the further tightening of the
management of the operation which is needed to bring
greater credibility to the potential of that operation.
The key elements of maintaining our cost leadership
position in the industry remain the achievement of
production targets and good financial discipline. Further
scope for improvement is still possible and productivity
remains the key factor in mitigating the expected cost
impacts going forward.
In the medium to longer term, fundamentals for PGMs
remain sound and underpin the Group's growth objectives.
The recovery in the auto sector and a continued regime of
tightening tailpipe emission standards, as well as a greater
adoption of these standards will result in strong demand
for PGMs in a constrained environment. The potential
expansion opportunity of Zimplats to one million ounces of
platinum per annum stands us in good stead to satisfy
growing demand in the future.
I extend my heartfelt thanks and appreciation to my fellow
Board members who have guided your Company so well
over the last number of years. My particular gratitude goes
out to Fred Roux, Fatima Jakoet, Steve Phiri and Shadwick
Bessit who all resigned from the Board during the year.
Through their commitment and dedication they were
always a helpful and welcome addition in our deliberations.
We welcome Paul Dunne as an executive director, as well
as Terence Goodlace and Mpueleng Pooe who were
appointed as non-executive directors at the August board
meeting. Their experience, vision and business acumen
will further strengthen the Board in guiding your Company
into the future.
We have taken cognisance of the impending requirements
of King III as well as the new Companies Act and have
initiatives in place to fulfil their respective requirements.
Implats remains committed to good corporate governance.
In closing, I feel privileged to have assumed the chairmanship
at this exciting and decisive juncture in the Company's
development. I have complete faith in the Implats team in
meeting the challenges we currently face. The efforts of
every member of the Implats family – my fellow directors, the
management team, our employees and contractors,
customers, suppliers and business partners – have
supported a solid performance in extremely difficult
circumstances. I am confident that with your continued
support, we will not be found wanting.
Dr Khotso Mokhele
Chairman |
