RBPlat pumps cash despite lockdown
The mid-tier miner warns of a possible delay in new Styldrift mine after losing 45 days to Covid-19
Royal Bafokeng Platinum (RBPlat) lowered its full-year output guidance by up to 80,000oz of platinum group metals (PGMs) after SA’s Covid-19 lockdown stripped 45 production days out of the first half of the year.
RBPlat benefited from a 77% improvement in the four key PGMs it mines, which more than offset the 13% fall in production of those metals resulting from the lost days of operations since SA entered a hard lockdown at the end of March.
RBPlat, which is 40% owned by a North West province community investment holding company, Royal Bafokeng Holdings, warned its new Styldrift mine might not reach its planned 230,000 tonnes a month of production during the third quarter of the year because of lockdown delays but that management would do all it can to bring the mine into steady state production on schedule.
RBPlat lowered its full-year forecast for PGM output by about 16% to between 380,000oz and 405,000oz because of disruptions stemming from the Covid-19 epidemic.
Revenue for the six months to end-June increased by nearly half to R4.6bn and after-tax profit of R870m compared with a loss of R164m a year earlier.
Strong cash generation left RBPlat with net cash of R702m compared with net debt of R285m.
RBPlat paid R225m in salaries during the lockdown.
“The impact of the shutdown due to the national lockdown on production and cost of mining and processing has been severe with necessary care and maintenance, shutdown and restart costs being incurred in the process,” RBPlat CEO Steve Phiri said.
Covid-19-related production losses amounted to nearly 54,000oz of platinum, palladium, rhodium and gold, split equally between Styldrift and the Bafokeng Rasimone Platinum Mine (BRPM). Both operations are near Rustenburg.
RBPlat sells all its metal production in the form of a concentrate to Anglo American Platinum (Amplats).
Financially, there was a limited negative effect from the disruptions to the Amplats metals processing circuit after it experienced two failures at its converter plants that feed its refineries during the first half of the year.
Amplats declared force majeure — a clause in contracts that allows it to break agreements for events beyond the parties’ control. Amplats suspended concentrate deliveries for a while.
Amplats and RBPlat agreed that Amplats would pay “a significant majority of the related proceeds during 2020, with the outstanding payments being settled in full before April 30 2021”.
RBPlat benefited from a R24m increase in royalties to nearly R85m from Impala Platinum for mining across boundaries and extracting RBPlat’s resources.
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