RBPlat to boost production

Styldrift output to be raised as company objects to safety stoppages that cut tonnages at Bafokeng primary mine

Royal Bafokeng Platinum (RBPlat) will triple production from its new Styldrift mine because of higher rand platinum prices as the project offsets lower output at the company’s primary mine, which was hit by a number of safety stoppages.

The safety stoppages also prompted an unusually sharp retort from the company.

RBPlat, in a partnership with Anglo American Platinum at Styldrift and the Bafokeng Rasimone Platinum Mine (BRPM), said the companies would invest R4.75bn to ramp Styldrift up to 150,000 tonnes of ore a month from the 50,000tonnes it had set as a first-phase target.

“The board expects that the funding solution may comprise a combination of surplus cash, operational cash flow, equity capital, and debt facilities of up to R2bn currently being negotiated,” RBPlat said on Friday.

The first phase cost R1bn and came from R700m generated by on-reef development at the underground mine and R300m from surplus cash.

The decision to set a low production target in the first phase was based on a platinum price of R17,500 per ounce at the start of 2016. However, the platinum price has averaged R19,000/oz in the first nine months of the year, prompting the partners to scale up the project to 150,000 tonnes a month.

“Progressing to this next phase of ramp-up at Styldrift I, positions the project well for the ultimate ramp-up to a 230,000 tonnes per month [of the] Merensky operation when further investment is warranted by the market,” it said.

The production from Styldrift in the September quarter offset reduced output from BRPM, which had four governmentordered safety stoppages, provoking severe criticism from RBPlat. The company noted the section 54 instructions were in the past related to nonconformance with safety standards.

“However, as widely publicised, the industry has in the past few months experienced a sharp increase in frequency and severity of section 54 instructions, which do not seem to be aligned with the applicable nonconformance,” it said.

“Contrary to our publicly declared acceptance and support in the past of section 54 stoppages in the interest of safety, we are unable to reiterate the same view with regard to these stoppages and we are very disappointed.” One such stoppage in August cost 17 production shifts and a loss of 7,000oz of platinum group metals.

Tonnages from BRPM fell 9% in the quarter but rising output from Styldrift meant the group’s tonnages delivered for processing increased 12% to 740,000 tonnes compared to the same quarter a year earlier.