Cash flow

Finweek English Edition - - INVESTMENT - Bafo­keng Rasi­mone Plat­inum Mine

other fac­tors.

All this with­out hav­ing to re­sort to strike ac­tion. It was of course help­ful that the Na­tional Union of Minework­ers ( NUM) is RBPlat’s main union rather than the more rad­i­cal As­so­ci­a­tion of Minework­ers and Con­struc­tion Union (Amcu).

Seten Naidoo, an an­a­lyst for Stan­dard Bank Group Se­cu­ri­ties, said in a note that RBPlat’s sta­ble op­er­at­ing per­for­mance was “...most no­tably due to its en­vi­able labour re­la­tions”. So strong are its re­la­tions that the com­pany had suf­fi­cient labour per­son­nel dur­ing the nor­mally dis­rup­tive pub­lic hol­i­days in April, he said.

A key el­e­ment to RBPlat’s suc­cess so far is its fo­cus. It only has one op­er­at­ing as­set and a moun­tain of cap­i­tal-in­ten­sive project work to trawl through. Tak­ing risks on its labour re­la­tions is bet­ting the farm; in other words, with­out sta­ble cash f low from BRPM, RBPlat will be un­able to fi­nance its fu­ture.

RBPlat is due to com­mis­sion its R11.3bn Styldrift project in a year’s time, of which only R3.14bn has been fi­nanced while an ex­ten­sion of BRPM, which re­places ex­hausted re­serves rather than ex­pands the mine, is due to sap another R700m over the next three years.

Prinsloo is re­laxed about the pres­sure on the bal­ance sheet; so much so that the board elected to close off a R1bn re­volv­ing credit fa­cil­ity which saves it some R600 000 per month in com­mit­ment fees.

“Also in­cluded in the R11bn on Styldrift is some R2.5bn in es­ca­la­tion and con­tin­gency. We haven’t used any con­tin­gen­cies to date so we don’t an­tic­i­pate the capex will be that much,” he said. The com­pany will look for up to R3bn in terms of debt in the first half of next year at the ear­li­est, he said. It raised R1.5bn in a rights is­sue ear­lier this year while it was in the teeth of the plat­inum strike.

The re­al­i­sa­tion among min­ing com­pa­nies such as RBPlat is that a clear line join­ing sus­tain­able labour re­la­tions and cash f low is dis­cernible, whereas in the past wage ne­go­ti­a­tions were an an­nual to bi-an­nual event to be tol­er­ated.

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