Introduction

Impala Platinum Holdings Limited (Implats) is one of the world’s foremost producers of platinum and associated platinum group metals (PGMs). Implats is structured around five main operations with a total of 21 underground shafts. Our operations are located within the Bushveld Complex in South Africa and the Great Dyke in Zimbabwe, the two most significant PGM‑bearing ore bodies in the world.


Implats Mineral Resource and Mineral Reserve Statement 2016 at a glance

The Mineral Resource and Mineral Reserve Statement as at 30 June 2016 is collated at a time when the platinum industry continues to face significant external challenges. The prevailing depressed metal price is reflected in the fact that greenfields exploration has been terminated and shaft sinking operations have been deferred at the Impala 17 Shaft and Afplats’ Leeuwkop Shaft. Despite the difficult circumstances some operations continue to deliver strong production performances with a positive outlook to grow the Mineral Reserve inventory at Zimplats, Mimosa and Two Rivers.

Group structure and operations

The Implats structure remained unchanged during the past year with operations at Impala in the Rustenburg area of the North West province, with the Refinery at Springs in the Gauteng province, the Marula Mine in the Limpopo province, Zimplats and Mimosa mines operating in Zimbabwe, the Two Rivers Mine near Burgersfort in the Limpopo province and the Afplats project near Brits in the North West province.

Impala Platinum Holdings Limited

96%
4%
Employee share ownership trust

Impala

100%

IRS – Impala Refining Services

87%

Zimplats

73%
27%
Tubatse Platinum (Pty) Ltd
Mmakau Mining (Pty) Ltd
Marula Community Trust

Marula

50%
50%
Sibanye Gold Ltd

Mimosa

74%
26%
Ba-Mogopa Platinum Investments (Pty) Ltd

Afplats

49%
51%
African Rainbow Minerals Ltd

Two Rivers



Summary statement 2016

  Moz Pt Moz 4E
Attributable 2016 2015 2016 2015
Mineral Resources* 194.0 195.7 364.9 367.6
Mineral Reserves 21.6 26.4 38.9 46.2

*Mineral Resource estimate is inclusive of Mineral Reserves.

  • There is no material change in the attributable Mineral Resource estimate which reduced by 1.7Moz Pt to 194Moz Pt
  • The attributable Mineral Reserve estimate reduced by 18% to 21.6Moz Pt mostly due to the decision to place 17 Shaft at Impala on low cost care and maintenance and the resultant exclusion of its area from the Mineral Reserve estimate. This was offset to some extent by the increase at Zimplats where the footprint of Bimha was increased
Attributable Mineral Resources

Attributable Mineral Reserves

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Contribution by Area

Attributable Mineral Resources of 194Moz Pt % as at 30 June 2016

* Zimplats’ Mineral Resources will reduce by 54.6Moz Pt if the GoZ is successful in obtaining the ground north of Portal 10.


Attributable Mineral Reserves of 21.6Moz Pt % as at 30 June 2016

The Mineral Resource and Mineral Reserve (Pt) contribution by operation is depicted below:

  • The attributable Mineral Resource (Pt) estimate is dominated by Zimplats and Impala, with the Zimplats Mineral Resource accounting for 49% of the total
  • Some 62% of the attributable Mineral Reserves (Pt) are located at Impala and a further 24% is hosted within the Main Sulphide Zone at Zimplats
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Mineral Rights

All mineral rights are in good standing without any known impediments. The Zimbabwean government (GoZ) has been pursuing greater participation in the mining sector by indigenous Zimbabweans. The Zimbabwe policy position on indigenisation was clarified in the 11 April 2016 policy statement, but there are ongoing discussions with the GoZ regarding indigenisation implementation plans (IIPs) for Zimplats and Mimosa. Depending on what position is ultimately taken by the GoZ, Implats’ attributable Mineral Resources and Mineral Reserves may be reduced. During 2013, the GoZ gazetted its intention to compulsorily acquire a large tract of ground in the northern portion of the Zimplats mineral lease, containing 54.62Moz Pt. As at 30 June 2016 there has been no conclusion to this matter, as Zimplats objected and is seeking to have the matter solved amicably.

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Mineral Resource and Mineral Reserve Statement

The Mineral Resource and Mineral Reserve Statement is compiled in accordance with guidelines and principles of the South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves (SAMREC Code), the South African Code for the Reporting of Mineral Asset Valuation (SAMVAL Code) and Section 12.11 of the JSE Limited (JSE) Listings Requirements as updated from time to time. Supporting documentation includes detailed internal reports, SAMREC Table 1 reports, and regular third-party reviews. A summary list of Competent Persons who compiled this report is included in this document.

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The SAMREC Code

Implats subscribes to the principles of the SAMREC Code of transparency, materiality and competency. The overarching strategic key focus areas of Implats are:

  • Maintaining prudent investment through the cycle
  • Maintaining strategic optionality and positioning the Group for the future
  • Improving efficiencies/profitability through operational excellence and safe production
  • Conserving cash, especially while metal prices remain depressed
  • Maintaining our social licence to operate
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Key Criteria

  • Mineral Resources are reported inclusive of Mineral Reserves unless otherwise stated
  • There are no Inferred Mineral Resources included in any of the Mineral Reserve estimates
  • Mineral Resources are only converted to Mineral Reserves once a feasibility study has been concluded and the new project or existing mine has been budgeted for and approved by the Implats board
  • The Mineral Resource Statements remain, in principle, imprecise and must not be seen as calculations. Rounding-off of figures may result in minor discrepancies
  • The Mineral Resources and Mineral Reserves are estimated as at 30 June 2016 and will be affected by changes in the metal prices, exchange rates, operating parameters, cost and performance, permitting and potential changes in legislation
  • No feasibility study for new mining infrastructure was completed during the past year; the study for the next Portal at Zimplats is near completion (Portal 6), a replacement for Portals 1 and 2. The new mining blocks will cover double the strike length of the existing blocks.
  • The Mineral Resources and Mineral Reserves are estimated for the PGMs (excluding osmium) and gold only, while some details of the other byproducts are mentioned
Long-term price assumptions in today’s money**
Platinum US$/oz 1 260
Palladium US$/oz 815
Rhodium US$/oz 1 045
Ruthenium US$/oz 35
Iridium US$/oz 460
Gold US$/oz 1 080
Nickel US$/t 13 955
Copper US$/t 5 730
Exchange rate R/US$ 14.80

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Mineral Reserve Sensitivity

Rigorous profitability tests are conducted to test the viability of the Mineral Reserves. A summary graph showing the price sensitivity of the total Group Mineral Reserves is depicted below.

Mineral Reserves vs real basket price

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Implats’ Mineral Reserves in Perspective

The updated allocation of Implats’ Mineral Reserves per shaft infrastructure as at 30 June 2016 is depicted in the accompanying graphic. The depth range below surface and quantum related to the infrastructure is shown and depicts, among others, the advantage at Zimplats in this regard.

Platinum Mineral Reserve and depth range for individual Implats shafts


General Implats numbers at 30 June 2016

FIFR 0.091
TIFR 12.31
Refined Pt production 1 438 300 oz
Headline earnings R83 million
Net cash from operating activities R2 731 million
Capital expenditure R3 560 million
Attributable Mineral Resources (Pt ounces) 194Moz
Number of employees 50 720

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Regional geological settings

South Africa

Zimbabwe


PGMs are a relatively rare commodity – only around 500 tonnes (excluding recycling) are produced annually, of which less than 230 tonnes are platinum – yet they play a progressively more important role in everyday life, such as in autocatalysts to control vehicle emissions, in the production of LCD glass and as hardeners in dental alloy. PGMs – primarily platinum, and the associated by-products, palladium, rhodium, ruthenium, iridium and gold usually occur in association with nickel and copper.


Implats exploits platiniferous horizons within the Bushveld Complex in South Africa and the Great Dyke in Zimbabwe. These two layered intrusions are unique in terms of size and geological continuity. Mining mostly takes place as underground operations focusing on relatively narrow mineralised horizons, with specific mining methods adapted to suit the local geology and morphology of the mineralised horizons.

The Bushveld Complex

The Bushveld Complex is an extremely large (65 000km2), two billion year-old layered igneous intrusion occurring in the northern part of South Africa. Rock types range in composition from ultramafic to felsic. The complex is not only unique in size, but also in the range and economic significance of its contained mineral wealth. In addition to the PGMs and associated base metals, vast quantities of chromium, vanadium, tin, fluorine and dimension stone are also produced.

The schematic diagram below shows the extent of the Bushveld Complex. The layered sequence, the Rustenburg Layered Suite, comprises five major sub-divisions. These are, from the bottom upwards, the marginal, lower, critical, main and upper zones. Two horizons within the critical zone, namely the Merensky Reef and the Upper Group 2 (UG2) Reef, host extensive economically exploitable quantities of PGMs. These two horizons, along with other layers, which can be traced for hundreds of kilometres around the complex, are the focus of Implats’ Operations. The PGMs – platinum, palladium, rhodium, ruthenium and iridium – as well as the associated gold, copper, nickel, cobalt, chromium and other minor metals and compounds, are mined concurrently, but recovered by different processes.

Chromitite layers present below the UG2 Reef contain little to no PGM mineralisation and are mined by other operators for their chromium content only.

Implats’ Operations on the Bushveld Complex comprise Impala Mine north of Rustenburg, Marula Mine north-west of Burgersfort and the Two Rivers Mine, a joint venture between Implats and African Rainbow Minerals Limited (ARM) situated south-west of Steelpoort.

The Bushveld Complex (simplified)
The Bushveld Complex (simplified)

GENERALISED STRATIGRAPHIC COLUMN OF THE BUSHVELD COMPLEX (NOT TO SCALE)


Vertical grade profile of the Merensky Reef at different localities

A detailed geological description of the various reef types is provided in the relevant operational sections. Examples of different Merensky Reef vertical grade profiles are shown above. It is clear that the grade distribution varies materially from area to area. The UG2 Reef morphology and associated vertical grade distribution also differs significantly between regions (see below), specifically in terms of the width of the main platinum bearing chromitite layer and in the number of layers. In general the grade increases if the chromitite layer width becomes thinner.

Vertical grade profile of the UG2 Reef at different localities

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The Great Dyke

The Great Dyke is a 2.5 billion year-old layered mafic-ultramafic body intruded into Archaean granites and greenstone belts. It is highly elongated, slightly sinuous, 550km long, north-northeast trending with a maximum width of 12km. It bisects Zimbabwe in a north-northeasterly trend and is divided vertically into a lower ultramafic sequence, comprising cyclic repetitions of pyroxenite, harzburgite, dunite and chromitite, and an upper mafic sequence consisting mainly of norite, gabbronorite and olivine gabbro. A diagrammatic section is shown opposite. It is U-shaped in section with layers dipping and flattening towards the axis of the intrusion. Much of the mafic sequence has been removed by erosion and at the present plane of erosion the Dyke is exposed as a series of narrow, contiguous layered complexes or chambers. These are, from north to south, Musengezi, Hartley (comprising the Darwendele and Sebakwe sub-chambers) and a southern chamber comprising the Selukwe and Wedza sub-chambers.

The main sulphide zone (MSZ), host to economically exploitable PGMs and associated base metal mineralisation, is located 10m to 50m below the ultramafic/mafic contact in the P1 pyroxenite. The PGMs, along with gold, copper and nickel, occur in the MSZ. A detailed description of the MSZ and the value distributions is provided in the relevant operations sections. The examples below comparing different areas indicate that the grade profiles vary between areas and that the platinum and palladium peaks are somewhat offset. Typically, the MSZ consists of a 2m to 10m-thick zone containing 2% to 8% of iron-nickel-copper sulphides disseminated in pyroxenite. The base of this nickel-copper-rich layer is straddled by a 1m to 5m-thick zone of elevated precious metals (Pt, Pd, Rh and Au). The base metal zone contains up to 5% sulphides, while the sulphide content of the PGM zone is less than 0.5%. This change in sulphide content is related to the metal distribution in a consistent manner and is used as a mining marker. It can normally be located visually in borehole core and with careful observation it can also be located underground, therefore careful monitoring supported by channel sampling is required to guide mining.

Chromitite layers present below the MSZ contain little to no PGM mineralisation and are mined by other operators for their chromium content only.

Implats’ Operations on the Great Dyke comprise Zimplats’ Ngezi Mine south-west of Harare and the Mimosa Mine, a joint venture between Implats and Sibanye Gold Limited situated east of Bulawayo.

The Great Dyke (simplified)
The Great Dyke (simplified)


Vertical grade profile of the Main Sulphide Zone at different localities

GENERALISED STRATIGRAPHIC COLUMN OF THE GREAT DYKE (NOT TO SCALE)


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Overview

The environment

Our activities associated with the exploration, extraction and processing of Mineral Resources result in the unavoidable disturbance of land, the consumption of resources and the generation of waste and atmospheric and water pollutants. Growing regulatory and social pressure, increasing demands for limited natural resources and the changing costs of energy and water all highlight the business imperative of responsible environmental management, particularly as our underground operations become deeper and consume more energy and water. This involves taking measures to address security of resource supply (for example through efficiency, recycling and fuel-switching) and to actively minimise our impacts on natural resources and on the communities around our operations. Taking these measures has direct benefits in terms of reduced costs and liabilities, enhanced resource security and the improved security of our licence to operate.

Implats has an environmental policy that commits it to conducting its exploration, mining, processing and refining operations in an environmentally responsible manner and to ensure the well-being of its stakeholders. The policy also commits to integrating environmental management into all aspects of the business with the aim of achieving world-class environmental performance in a sustainable manner.

Our management of the environmental impacts of our operations and processes involves the following focus areas:

  • Promoting responsible water stewardship by minimising water use and water pollution
  • Minimising our negative impacts on air quality
  • Responding to climate change risks and opportunities and promoting responsible energy management
  • Managing our waste streams
  • Promoting responsible land management and biodiversity practices

We are committed to attaining and retaining ISO 14001 certification at all our operations. All our operations are certified, other than Marula, which is undertaking its new certification process. In line with our environmental management system expectations, all operations are required to identify and report on environmental incidents. Systems are in place to investigate and determine the direct and root causes of high-severity incidents and to address and close out these incidents.

Further details relating to the materiality of environmental aspects, management processes, performance and commitments are reported in the 2016 Sustainable Development report. Rehabilitation provision is further discussed in the 2016 Implats Annual Financial Statements (refer in particular to notes 1.3.13 and note 19). These reports will be published at www.implats.co.za in September 2016. The financial provisions for the rehabilitation can be summarised as follows:

Name Current cost
estimates
R million*
Financial
provision
R million**
Impala 858 522
Springs 231 180
Marula 109 53
Afplats 17 9
Zimplats 557 318
Totals 1 772 1 082

*The current expected cost to restore the environmental disturbances as estimated by third-party experts excluding VAT, P’s & G’s and contingencies

**Future value of the current cost estimates discounted to current balance sheet date as provided in the annual financial statements of the Group.

In compliance with the DMR, the South African liabilities are secured through trust funds, insurance policies and bank guarantees.