Picture: ISTOCK
Picture: ISTOCK

Royal Bafokeng Platinum (RBPlat) is closing in on completing the first phase of a large, new, mechanised mine that will change its cost structure, allowing it to ride out the prevailing weakness in the platinum price.

The SA platinum industry has come under tremendous pressure from flat prices for most of the metals it produces and costs rising faster than it can control or than the money it eans from production.

Impala Platinum and Lonmin, two of the world’s largest platinum miners, are undergoing extensive restructuring to cut jobs — a combined tally of nearly 30,000 people over the next two or three years — and close old, unprofitable shafts.

The Styldrift mine, which cost about R11bn to build, is focusing on platinum-dominant ore, but CEO Steve Phiri said the cost of the mechanised mining methods in the new, shallow and modern mine would be 15% below that of RBPlat’s other mine, the Bafokeng Rasimone Platinum Mine.

The mine will reach steady state production in the fourth quarter of 2018.

The newly bought concentrator at the neighbouring Maseve mine that was mothballed by its Canadian owners, Platinum Group Metals, would be commissioned a few months earlier, further reducing the costs of processing the metal by not having to transport it to the Bafokeng metals complex.

Styldrift had generated R400m towards its own capital expenditure in the first half of the year to end-June because all the development work was being done on the reef, allowing for early cash flows to ease the financial burden of paying for the project, said CFO Martin Prinsloo, who is leaving RBPlat.