Earning their social licence to mine
One of South Africa’s leading mid tier platinum miners, Northam Platinum, is poised to help grow the economy of Limpopo province and South Africa and help to overcome some of its social challenges.
Collin Smith, executive for Human Resources at Northam, told the recent Limpopo International Investment Conference about the company’s ambitious expansion prospects, which form part of its R1.2-billion capital expenditure programme announced in the 2016 financial year.
Northam Platinum is a fully integrated producer of the six platinum group metals that include platinum, palladium and rhodium. These have extensive industrial, cosmetic and jewellery applications, but platinum’s most popular use is for manufacturing medical devices and clean catalytic converters. The platinum industry has been depressed since the financial crisis of 2008 and the European debt crisis that followed it, but Northam nevertheless maintains a strong production pipeline. It has just over 11 000 employees.
The company’s assets, which lie on both the Eastern and Western limbs of the Bushveld Complex, are all located in Limpopo. Following its Black Economic Empowerment deal last year, the company has a 31.4% empowerment shareholding, which exceeds the requirements of the Mining Charter currently being revised by government and industry.
The Company’s wholly owned mines are the Booysendal Mine, a shallow, mechanised mine currently producing 160 000 oz per annum. There is also Zondereinde mine, which produces 480 000 oz of the best grade of platinum in the industry. Like most platinum miners, Northman produces chrome as a by-product and has a wholly owned chrome-producing subsidiary called Northam Chrome.
The Booysendal North mine has received about R 363-million in capital expenditure, while R14-million has been spent on affordable housing for some of its 2 900 employees. Booysendal South is set to undergo expansion that begins with an R450million acquisition targeting an ore body that contains an estimated 60 million ounces of platinum. The Zonderinde mine is currently undergoing R303-million expansion project to sustain the mine’s 30-year lifespan. About R24.4-million has been spent on affordable housing for some of the mine’s 8 300 employees.
Northam also has two concentrators, a smelter, a base metals removal plant on site at Zondereinde and is about to spend R750-million on smelter expansions. In addition to all this, Northam Platinum is also set to acquire the Amandelbult mining rights, worth R1-billion, on the northwestern boundary of Zondereinde.
Smith notes that Northam is well positioned in a stressed sector and that the expansion programme is fully funded. This positions the company well for when the global economy recovers, or if newly elected United Sates President Donald Trump delivers on his planned infrastructure spending, which may provide a boost to various metals and commodities, including iron ore and platinum.
The South African mining industry has been a leading capital investor as well social spender over the past decade or so. It is a leading contributor to social housing delivery, which has seen 2.4 million units delivered since 1994 and is recognised by the World Bank as being the most comprehensive in the developing world. Mining companies contributed to delivering housing by taking part in a programme to convert single hostels to family units.
Smith acknowledged that the housing shortage is one of the critical issues the company will have to address as it expands its operations. This, along with power and water supply are issues, are issues the company constantly tackles together with government.
Smith says the area that he is in charge of (human resources) is addressing the shortage of suitably skilled employees for the mine. He says this requires constant collaboration with both universities and Training and Vocational Education Training (TVET) Colleges to help produce and refine the skills that the mining industry requires.