Royal Bafo­keng lifts pro­duc­tion

Business Day - - FRONT PAGE - Al­lan Seccombe Re­sources Writer sec­combea@bdfm.co.za

The ax­ing of 520 em­ploy­ees and re­moval of oth­ers to more prof­itable ar­eas drove Royal Bafo­keng Plat­inum costs down dur­ing its third quar­ter and lifted pro­duc­tion, the com­pany said on Thurs­day.

The ax­ing of 520 em­ploy­ees and re­moval of oth­ers to more prof­itable ar­eas drove Royal Bafo­keng Plat­inum (RBPlat) costs down dur­ing its third quar­ter and lifted pro­duc­tion, the com­pany said on Thurs­day.

RBPlat started re­struc­tur­ing its op­er­a­tions in the first six months of the year and con­cluded the process in the Septem­ber quar­ter.

The process en­tailed cut­ting 520 po­si­tions to bring down the fixed-cost base at its Bafo­keng Rasi­mone Plat­inum Mine and shift­ing two-thirds of its min­ing crews work­ing at the mine’s South shaft on the UG2 reef to mine the more prof­itable Meren­sky reef at the South and North shafts.

The cost of pro­duc­ing plat­inum fell 11%, to R14,535/oz.

Mined ton­nage in­creased by 8% and re­cov­er­ies of met­als nudged higher, off­set­ting a small dip in the grade.

As a re­sult, the com­pany posted a 7% im­prove­ment in metal out­put, record­ing 89,300oz of the four plat­inum group met­als, of which nearly 58,000oz were plat­inum.

Bloomberg re­ports that In­vestec an­a­lyst Nkateko Mathonsi up­graded RBPlat to a buy from a sell and raised the tar­get price to R36, from R30. The con­sen­sus of an­a­lysts’ tar­get price was R37.91, a 19% in­crease over the past three months.

RBPlat said its total cap­i­tal ex­pen­di­ture for the quar­ter rose by R346m to R613m, com­pared with the match­ing pe­riod a year ear­lier as its work on the new Styldrift mine, where it has in­creased min­ing and con­struc­tion ac­tiv­i­ties, ab­sorbed the most of that in­creased spend.

With R57m spent at Styldrift dur­ing the quar­ter, RBPlat has now in­vested R7.8bn on the new mine, which will fo­cus on the sought-after Meren­sky reef.

The change in the reefs tar­geted meant the total con­tri­bu­tion of the UG2 reef fell to just 18% of total tonnes milled.

The BRPM mine con­trib­uted 670,000 of the milled tonnes dur­ing the quar­ter, while Styldrift gen­er­ated 155,000 tonnes for the quar­ter.

The share closed flat at R31.

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