Sibanye realises synergies from its R4.3bn purchase of Lonmin
The company relocates one of the concentrators it has at Marikana mine in SA, where there is excess concentrator capacity, to Mimosa platinum mine in Zimbabwe
Sibanye-Stillwater, the world’s largest platinum miner, sold one of its concentrator plants at the recently acquired Lonmin assets to underpin and expand production at a mine it shares in Zimbabwe.
The Mimosa platinum group metals (PGM) mine in Zimbabwe is an old operation that has been pushed beyond its capacity, and its mill — a large, spinning drum used to break ore into fine material to expose the metal — has broken down unexpectedly.
Mimosa’s joint owners, Sibanye and Impala Platinum, agreed to the $10m purchase of a concentrator plant currently at the Lonmin — now called Marikana — operations in SA. The plant will be dismantled and hauled to the Zimbabwean mine, 150km east of Bulawayo in southern parts of the country.
Sibanye bought the whole of Lonmin, then the world’s third-largest platinum miner, earlier in 2019 for R4.3bn in an all-share transaction, combining the assets with the Rustenburg and Kroondal mines it owns in a chunky belt of PGM-rich real estate east of Rustenburg. As Sibanye developed a better understanding of the Marikana assets it found there were some it didn’t need, said spokesperson James Wellsted.
“The concentrator Mimosa’s buying is from Marikana, where we have excess concentrator capacity, so we sold one to Mimosa. You can see the synergies coming through,” he said. Mimosa, which has a life until 2030, produces about 116,000oz of refined platinum a year. The R150m concentrator will be essentially used for critical spares to the aged Mimosa plant, but by adding various components it will provide an extra 15% to 20% of capacity, said Johan Theron, Implats group executive in charge of corporate affairs.
“The Mimosa concentrator plant was originally constructed from second-hand equipment. Over the years the plant was expanded in small, incremental steps by buying and adding more and larger second-hand equipment,” he said.
In the September quarter, the first of its 2020 financial year, Implats noted production from Mimosa fell by 5,000oz of platinum concentrate to 25,000oz as milled tonnages fell by 16% to 589,000 tonnes. Concentrate is sent across the border to SA to be smelted and refined at Implats’s operations.
“Concentrate production was impacted by extended repairs to one of the milling circuits,” Implats said at the end of October. During its problems with its mill, Mimosa stockpiled mined ore ahead of the plant, a usual practice at the operation,
“The concentrator plant is the factor limiting output at the mine. It’s a bottleneck and they always have a stockpile in front of the plant,” Theron said.
“From the latest mill breakdown incident, it is also clear that the plant’s condition and its limited capacity place steady operation at the mine at some risk. So, this is again buying an old concentrator plant to address this, he said. The Marikana plant will not only provide spare parts to refurbish the Mimosa concentrator, but it will also add extra or redundant capacity essential to cope with extra material coming out of the mine.
“This should cost-effectively improve concentrator capacity by about 10% to 20%. It will also take pressure off the concentrator plant as the limiting output factor and allow smoother continuous operation of the mine,” said Theron.
“Mimosa will also mine some lower-grade material over the next few years as a feature of its ore body. So, having more concentrator capacity will be great to off-set this,” he said.
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