RBPlat warns of overrun
Royal Bafokeng Platinum (RBPlat) has warned of an overrun on its R11bn budget to build a new mine that it initially slowed down to curtail spending at a time when platinum prices were weak and the demand outlook for the industrial and precious metal was uncertain.
In its full-year results, RBPlat said the overall cost of the first phase of its Styldrift mine had increased, without giving a specific number apart from saying it would cost more than the original R11bn.
During a results presentation RBPlat chief financial officer Martin Prinsloo said R6.09bn had already been spent on the mine. The company and its partner, Anglo American Platinum, would spend a further R4.75bn to bring the mine’s output to 150,000 tonnes of ore a month by the end of 2018 from the roughly 50,000 tonnes a month it was delivering now.
To take the mine to its full capacity of 230,000 tonnes per month, a 100,000-tonnes-permonth concentrator would have to be built at a cost of R1.6bn, which would come on top of the R10.8bn to get it to the 150,000 tonnes a month level.
While 74% of the R1.bn spent on the mine in 2016 came from internally generated revenue at the mine as development was happening on reef, RBPlats was looking at a “robust funding” solution to get to 150,000 tonnes a month, including R2bn of debt facilities and it was assessing “various capital market alternatives”, Prinsloo said.
Above-inflation cost rises at the Bafokeng Rasimone Platinum Mine were the basis of many questions analysts had for CEO Steve Phiri and Prinsloo, particularly in a low-cost environment for the basket of metals the company produces.