SA platinum major Royal Bafokeng Platinum has revealed that due to a slow-down in construction at its new Styldrift I mine, steady-state production will occur in Q1, 2020 – a year later than originally intended.
RBPlat believes the current depressed market cycle is expected to prevail for the medium term and this announcement is in accordance with this.
For now, the focus has been on managing the company through the current depressed market conditions.
At Styldrift I this included the following:
- Scaling down of activities on the project: Q3 expenditure 32% less than in Q2 of 2015;
- Termination of all major contracts notably the mining contract with Aveng Mining, contractors involved with the overland conveyor belt construction and deferral of most contracts for supply of mining equipment and associated infrastructure;
- Transfer of experienced development resources from Phase III at BRPM to Styldrift I to assist with early development of key infrastructure;
- Progressing with on-reef development to improve face length availability contributing 12 000 t of development ore during Q3, 2015. Styldrift I now has four operating teams expected to deliver 40 000 t of ore during Q4, 2015;
- Support and lining of silo number 2 commenced in October 2015 and is 51% complete, remaining on course for completion by year end with the bottom of silo loading structure complete in 2016; and
- Commissioning of ventilation shaft number 1 was completed in November.
Delaying the start of stoping at Styldrift I ensures that value is not destroyed by ramping up high quality Merensky ounces into a depressed market but that instead the business is well positioned to begin ramp-up when the market improves.
A vital company project
The Styldrift I project remains a key part of RBPlat’s organic growth strategy. It is a high grade, shallow mechanised mine which at steady state will deliver 230 000 tpm of Merensky ore, yielding 320 000 4E ounces per annum.
The project provides access to Merensky resources of 72.9 Mt at a resource grade of 6.94 g/t 4E with significant base metal credits. At steady state its operating costs will be about 15% cheaper per tonne than BRPM, placing it firmly in the first quartile of the industry cost curve.
Styldrift’s lifespan exceeds 60 years with the first 30 years of extraction from the Merensky reef, followed by a further 30 years of mining on the UG2. At steady state Styldrift I will employ approximately 3 000 people therefore providing economic benefits to surrounding communities and the greater region.
Capital expenditure on the Styldrift I project amounted to R5.186 billion to end of Q3, 2015 with the Main shaft commissioned and capable of hoisting up to 230 000 tpm.
Expenditure on the underground infrastructure which will be completed in 2016 amounts to R1 billion of which R0.7 billion is anticipated to be funded from on-reef development revenues at Styldrift I and surplus cash generated by BRPM.
The development that will be completed during 2015 and 2016 prepares the mine for stoping from the first quarter of 2017 but may still be deferred if market conditions do not support the start of stoping at that time.