COMPANY NEWS IN BREIF

Implats reports earnings slump amid lower prices

Impala Platinum expects to report a more-than 20% drop in annual earnings as a result of weak metal pricing and lower refined production as a result of load curtailment.

Gross refined and saleable volumes declined by 4% to 2.96 million ounces of the basket of six metals it produces in the year to end-June, the company said in an update. Softer US dollar basket pricing was partially offset by the rand exchange rate weakening by 16%, resulting in a 4% decline in group sales revenue per ounce.

Implats, valued at about R104 billion on the JSE, has operations in SA, Zimbabwe and Canada, and generated headline earnings of about R32 billion in its 2022 year.

In 2023, about 36 000 ounces of production were foregone due to power outages in SA and Zimbabwe, while a further 101 000 ounces were deferred as a result of power constraints.

The deferred ounces also came amid a delayed restart of a refurbished furnace, while 10 000 were due to cable theft at Impala Rustenburg.

Implats said the operating environment in the year was typified by continuing headwinds, "and regional power constraints provided a notable impediment to operational continuity and delivery."

During the period, Implats incurred a cash outflow of circa R4.9 billion and issued circa 16.2 million shares to increase its aggregate holding in Royal Bafokeng Platinum to 56.41% at the end of June. The financial results for the period will therefore include the consolidation of RBPlat results from the beginning of June, the final month of its 2023 year. Implats began the year with about 850.7 million shares.-Fin24

Jindal Steel & Power plans to build mine in SA

A plan by Jindal Steel & Power to develop an up-to $2 billion (R38 billion) iron-ore mine in South Africa is facing opposition from communities who say the operation would require thousands of homes and graves to be relocated.

The proposed mine in Melmoth, in KwaZulu-Natal, would dwarf recent investments in South Africa’s mining industry. It could produce 32 million tons of magnetite ore a year by 2031 after starting production in 2027, the company said in an emailed response to questions. Jindal is controlled by Asia’s richest woman, Savitri Jindal, and family.

“Our community of Makhasaneni has been fighting Indian giant mining company, Jindal Mine, who for years have been intruding with their plans to dig up iron ore in the lush hills that we have called home for generations,” community members said in a petition signed by more than 6 700 people. Jindal says a minority of residents oppose the project.

The obstacles faced by the company highlight the challenges of investing in South African mining, where decades of violations of environmental and social rights under apartheid eroded trust. At the same time, chronic unemployment and poverty in one of the world’s most unequal nations often pits people against each other when projects offer the prospects of work and business opportunities for some.

The Entembeni Crisis Forum, the group that organised the petition, said an assessment of the area that Jindal wants to mine shows it could lead to more than 3 000 households and 3 000 graves being moved.-Fin24

Glencore profit plunges on lower prices

Mining and trading giant Glencore has taken a big profit hit as commodity prices, particularly coal gas, normalised from elevated levels seen in the wake of Russia's invasion of Ukraine.

Headline earnings fell almost 60% to about $4.28 billion (R80.4 billion) in the six months to end-June, with revenue falling 20% to $107.4 billion. This followed "extreme global geopolitical and economic turbulence" in 2022, which pushed prices for many coal and gas benchmarks to record levels.

Against the backdrop of "a normalisation of commodity market imbalances and volatility, primarily across the energy spectrum", Glencore said its marketing and industrial segments still posted a healthy earnings performance, although notably lower compared to the record performance in 2022.

Core profit in its marketing business more than halved, but the group said this was still a strong performance in the context of the past ten years, given the volatility of global conditions.

Glencore's marketing business involves commodity trading, sourcing commodities from suppliers and selling them to international customers.

"The strength of our diversified business model across industrial and marketing, focusing on metals and energy, has again proved itself adept in a range of market conditions," said Glencore CEO Gary Nagle in the results.

The business remains highly cash generative, allowing the group to also announced "top-up" returns to shareholders of $2.2 billion, comprised of $1 billion in a special dividend and $1.2 billion in share buy backs.-Fin24

Siemens Energy plunges into red

Siemens Energy reported Monday a record third-quarter net loss after taking a €1.6-billion (R33 billion) hit to fix technical problems with its onshore wind turbines.

The group had warned in June that quality issues at its troubled Siemens Gamesa wind unit were worse than previously thought, sending its share plunging more than 30%.

After initially estimating the repair costs at over a billion euros, Siemens Energy announced a charge of 1.6 billion euros to resolve the issues affecting "certain rotor blades and main bearings in the 4.X and 5.X platforms".

The charge weighed heavily on the company's overall performance in its fiscal third quarter, which slumped to a net loss of 2.9 billion euros. The company had booked a loss of 564 million euros in the same period a year earlier.

The latest result was also dragged lower by extra charges of 600 million euros in its offshore wind business, which has been hit by "higher product costs" and difficulties in ramping up capacity.

Siemens Energy said it was "additionally burdened" by a 700-million-euro write-down of deferred tax assets during the quarter.-Fin24