Anglo American Platinum, or Amplats, has declared force majeure to customers, suppliers of third-party purchase of concentrate and suppliers of tolling material following the temporary shutdown of the entire Anglo Converter Plant at the Waterval smelter in Rustenburg.
The company’s Anglo Converter Plant (ACP) phase A converter plant was damaged following an explosion within the converter on 10 February 2020. Nobody was injured in the incident and work has started to repair phase A, which is expected to be completed by Q2 2021.
As per normal business procedure, the phase B unit was commissioned to take over from the phase A plant and was in the process of ramping up to steady state, when water was detected in the furnace.
Notwithstanding extensive testing being conducted to determine the source of the water, and a number of circuits being isolated, water continued to be observed in the furnace. This posed a high risk of explosion and Amplats determined that it had no other option but to temporarily shut down the phase B unit, to ensure the safety of all employees, and avoid a catastrophic event.
It is anticipated that the repair works to fix the phase B unit will take approximately 80 days.
As a result of the temporary closure of the entire ACP, Amplats has had to declare force majeure as it is unable to complete the processing of material during the converter repair.
While production from own mines will continue, the concentrate from the mines will continue to be smelted at one of the company’s four smelter complexes.
However, production from own mines, as well as third party material will not be able to be converted to refined production while the ACP is undergoing repairs.
Sibanye-Stillwater to process its own material
One of Amplats’ customers, PGM mining company Sibanye-Stillwater, has received written notification of force majeure regarding the toll agreement between Amplats and Sibanye-Stillwater’s Rustenburg operation and the Purchase of Concentrate (PoC) agreement with Sibanye-Stillwater’s Kroondal and Platinum mile operations.
Sibanye-Stillwater’s Marikana and US-based PGM operations are not affected and will benefit from the commensurate short-term commodity price increases due to the Amplats supply disruption.
Amplats has indicated that its converter plant will be unavailable for at least eight weeks, during which period the force majeure would remain in effect and it would be unable to fully process the Rustenburg, Kroondal and Platinum mile concentrate.
Sibanye-Stillwater says that it has significant spare PGM processing capacity at the Marikana operations and at the Precious Metal Refinery in Brakpan and will be assessing how best to utilise this capacity.
RBPlat also receives force majeure notice from Amplats
Royal Bafokeng Platinum has also received written notification about force majeure under the Disposal of Concentrate Agreement (DOCA) between Royal Bafokeng Resources, a wholly owned subsidiary of RBPlat, and Rustenburg Platinum Mines, a wholly owned subsidiary of Amplats.
RBPlat says that in the notification, Amplats said that the ACP would be unavailable during repair works to fix the phase B unit which Amplats anticipated would take approximately 80 days.
The notification also stated that RPM would be unable to comply with its obligations in terms of the DOCA during this period.
RBPlat and RBR are currently reviewing the force majeure notice.
Royal Bafokeng Resources currently sells all of its concentrate to Rustenburg Platinum Mines and is in discussions with Amplats and Rustenburg Platinum Mines to explore possible ways of addressing the issues raised by Rustenburg Platinum Mines.
In the interim, while it considers all its options and without prejudice to any of its rights, Royal Bafokeng Resources has temporarily acceded to the request not to deliver concentrate to Rustenburg Platinum Mines, pending the outcome of discussions with Amplats and Rustenburg Platinum Mines. The RBPlat board of directors will update the market as soon as it is in a position to quantify the near term impact of this development with greater accuracy, following its discussions with Amplats and Rustenburg Platinum Mines.