Impala Platinum Holdings (Implats) capitalizes on BHP's mistake in Zimbabwe.
With Zimplats profitable, it may rescue Implats as its South African mines struggle.
THREAD 🧵: On a Date with Zimplats Holdings Limited - Pt 3
Zimplats, originally Delta Gold's Zimbabwean platinum assets, partnered with BHP to develop them.
BHP struggled, particularly with the Hartley Platinum Mine, and sold its share to Zimplats
Zimplats then became a unit of Implats to fund its Ngezi project
Implats is a leading, fully integrated Platinum Group Metals (PGMs) producer.
The Group comprises seven mining operations and Impala Refining Services (IRS), a refining business.
Its operations are located in South Africa and Zimbabwe and Canada.
PGMs comprise six silver-white metals: platinum, palladium, rhodium, ruthenium, iridium, and osmium.
These metals occur together in nature and are mainly produced from the same ore in South Africa, Russia, North America, and Zimbabwe.
In Zimbabwe, Platinum Group Metals (PGMs) are found along the Great Dyke.
This linear geological feature runs nearly north-south through the center of the country.
It consists of a narrow band of ridges and hills stretching approximately 550 kilometres.
Zimplats Holdings, listed on the Australian Securities Exchange @ASX, operates Zimbabwe Platinum Mines (ZPM).
ZPM is a significant producer of PGMs, exploiting ore bodies located on the Great Dyke, southwest of Harare known as Hartley Geological Complex.
ZPM operates 5 mines, 4 concentrator plants, and a smelter.
The concentrator plants process ore from the mines, which is then further refined at the Selous Metallurgical Complex (SMC) in Selous, where the smelter is located.
After the expiration of the special mining lease, ZPM was granted 2 mining leases #36 (ML36) & #37 (ML37)
These leases are valid for the entire lifespan of Zimplats' mining operations. ML36 covers the Hartley area, while ML37 encompasses the Ngezi mines.
Ngwarati, Rukodzi and Mupfuti mines are soon to come to their end as they become depleted and will be fully replaced by Mupani and Bimha Mine.
Ore produced by 5 mines in 2023 was 7.6 million tonnes (Mt) compared to (2022: 7.1 Mt). Bimha contributing 38%.
Matte and concentrate sold to IRS in 2023 totaled 603,000 6E ounces (oz).
Matte is a mixture of various base metal sulfides that contain precious metals, produced during smelting and converting.
The 6 elements (6E) include 5 PGMs (except osmium) & gold.
IRS a subsidiary of Implats, serves as the sole customer of ZPM
IRS specializes in toll refining and purchasing metal concentrates for Implats
It offers smelting and refining services through off-take agreements with both Implats units
& third parties.
PGMs are mainly used in automotive autocatalysts, converting over 90% of harmful emissions in petrol and diesel engine run vehicles' exhaust systems into less harmful substances.
The other use cases are listed in this article.
ipa-news.com/assets/applications/25_applications_of_pgms_ipa_fact_sheet_final.pdf?PHPSESSID=2c29d3f959eac4456220d8d833909964
Sales of matte and concentrates generated USD 962.29 million in 2023.
The revenue decline compared to previous periods was attributed to low metal prices as a result of oversupply of PGMs and reduced vehicle sales for internal combustion engines.
Zimplats has overcome insurmountable challenges under Alex's 17 years in leadership whilst remaining profitable, successfully navigated:
- Indigenization policy
- Inflationary pressures
- Supply chain disruptions
- The shift in consumer preference
The share price for Zimplats has been declining throughout the year.
It started at AUD 21.73 on January 2nd and has dropped to AUD 13.85 as of September 13th.
Zimplats has 107,637,649 shares outstanding, with 87% held by Implats.
The profits of Anglo American Platinum slumped by 71% in 2023 triggering fears of job cuts in South Africa.
The outlook for PGMs seems dire as its major demand generator the internal combustion engines vehicles are in serious competition with EVs.
However recent data is showing a cooling in demand for EVs in favour of hybrids which Toyota is championing.
Apart from the demand side there is talk of declining supplies from miners which plays well in improving prices.
Is Zimplats a buy or sell NOW?
This is part 3 of On a Date with Zimplats Holdings. Part 4 - PGM industry.
If you are interested in investing in Zimplats Holdings which is listed on the @ASX but reside in Zimbabwe please check out this article
greedysouth.co.zw/2022/12/how-to-invest-in-australia-and-us.html?m=1
Each Sunday will be on a Date with a company listed on the @ASX.
The purpose of this thread is to have a minimum appreciation of listed firms.
Disclaimer: Do not misconstrue this thread as investment advise DATE companies before you buy its shares