RBPlat considers resumption of next Styldrift expansion phase

JOHANNESBURG (miningweekly.com) – One year after scaling back expansion plans for Styldrift I, JSE-listed Royal Bafokeng Platinum (RBPlat) is now considering the next phase of its two-phased ramp-up, which will bring it to a 150 000 t/m “sweet spot” and take place over the next two-and-a-half years.

The company on Friday reported that it believed that the industry was now progressing from the “zone of uncertainty” into the “zone of progression”.

In August 2015, RBPlat materially reduced construction activities and the related capital expenditure (capex) on the Styldrift I project amid a sustained depression in the platinum group metals (PGMs) market.

The average rand basket price at the time was about R16 200/oz.

Following an increase in the rand basket price to R17 500/oz, RBPlat committed to R1-billion capex at Styldrift I for the 2016 year to facilitate a production rate of up to 50 000 t/m of on-reef development.

During the three months to September 30, steady progress was made with mining and construction activities, with RBPlat maintaining its revised construction schedule for the kick-off of ramp-up-related works in the first quarter of 2017.

Now, with the average rand basket price for the first nine months reaching about R19 000/oz, the company plans to ramp up the Styldrift project.

“The 150 000 t/m level represents a sweet spot in Styldrift I’s ramp-up profile towards 230 000 t/m as it secures the optimal level of Merensky production for the company without the necessity to incur, in the current PGM environment, the significant expenditure that would be required for a further processing plant and infrastructure development to process production above this level,” the company explained in an update to shareholders.

RBPlat’s attributable share of the capex for this next phase of the development is about R3.2-billion of a total estimated R4.75-billion.

Capex for the third quarter to September 30, reached R235.5-million, bringing the total project capex to date to R6.09-billion.

Meanwhile, the Bafokeng Rasimone platinum mine (BRPM) joint venture (JV), in the North West, maintained production of 837 000 oz of 4E – platinum, palladium, rhodium and gold – during the third quarter of the year.

BRPM tonnes delivered decreased 9% to 590 000 t during the three months to September 30, on the back of the impact of Section 54’s issued during August and the subsequent “cautious approach” adopted by RBPlat in restarting normal operational activities.

During August, a single Section 54 instruction issued on its North shaft operation resulted in 17 lost production shifts and shaved an estimated 59 000 t, or 7 000 oz, off of 4E output.

This was offset by an increase in Styldrift I tonnes from 12 000 t in the corresponding prior quarter to 150 000 t during the third quarter of this year, which delivered a grade of 3.18 g/t of 4E.

This contribution had resulted in total tonnes delivered increasing by 12% to 740 000 t, compared with the 662 000 t reported in the prior corresponding period.