The Bokoni mine, in Limpopo, remains in development with its key Middelpunt Hill UG2 and Brakfontein Merensky underground operations estimated to achieve steady state production by the fourth quarter of 2016 and by 2019, respectively.
Given various operational and market related challenges experienced during the ramp up phase of the two operations, Bokoni mine has had to ensure that its older, higher cost Merensky operations at the Vertical and UM2 shafts remained operational for longer than originally contemplated, the company said in a statement on Wednesday, adding that this position “is no longer sustainable in light of limited available ore reserves remaining at these shaft operations and continued depressed platinum group metal (PGM) prices.”
Reason for restructure
To ensure the future sustainability of Bokoni mine, the company has had to implement an operational and financial restructure plan at Bokoni mine.
The primary objective of the restructure plan is to enable Bokoni mine to endure a prolonged period of depressed PGM commodity prices, by reducing its existing cost structure and increasing production volumes of higher grade ore from underground operations.
Implementation of the restructure plan at Bokoni mine is anticipated to result in:
- the older, high cost UM2 and Vertical Merensky shaft operations being placed on care and maintenance;
- continued ramp up of the Middelpunt Hill UG2 and Brakfontein Merensky development shafts to steady
- state production of 60 000 tpm by the fourth quarter of 2016 and 100 000 tpm by 2019, respectively;
- continued mining at the Klipfontein Merensky open cast operation as a mill gap filler during ramp up of the underground operations;
- significant reduction in labour overheads; and reduction in Bokoni Mine’s unit cost of production.
Bokoni Mine has issued a Section 189 (3) notice to relevant parties pursuant to Section 189A of the South African Labour Relations Act (LRA), 66 of 1995, for the commencement of a consultation process on the contemplated retrenchments of certain of its employees based on operational requirements.
Job loss mitigation
In an effort to reduce the potential impact of the restructure plan, Bokoni mine will propose offering voluntary severance and early retirement packages and also plans to introduce comprehensive support measures to mitigate the impact of the proposed restructuring on affected employees.
The 60 day consultation process associated with the restructure plan as contemplated in the LRA is anticipated to end on 16 November 2015.