Johannesburg, South Africa — MININGREVIEW.COM — 17 August 2011 – South Africa’s Royal Bafokeng Platinum (RBPlats) hopes to fund its expansion projects, including one in the pipeline that could cost R10 billion, mostly through cash generated by the company’s existing operations.
In releasing its interim results here, RBPlats “’ a black-controlled, mid-tier producer of platinum group metals (PGMs) “’ confirmed that its Styldrift II project could cost R10 billion, and that it was readying a concept study for the project.
‘We are in the very early stages of this, and probably looking at a 10-year or 10-year-plus timeline,” chief financial officer Martin Prinsloo told Reuters in an interview.
He added that the R10 billion was a very rough estimate at this stage and would likely be funded mostly through capital generated by its Styldrift I project. This project is scheduled to take off in late 2014, and is expected to more than double the group’s platinum production to 610,000ozpa by 2017.
“Once it is up and more than doubles our production, there will be a huge chunk of Styldrift II that will be funded from our existing operations “’ over half,” he said. He added that the remainder would be funded from an optimal combination of debt and equity.
The Styldrift I project includes a concentrator and has been priced at around R11.8 billion, and Prinsloo said over half of it was being supported by cash from the business.
Prinsloo added that the group was hoping to contain labour costs in the longer run by lifting production without adding significantly to its already high wage bill. Styldrift 1 is heavily mechanised, so while it is expected to double group output, Prinsloo said it would likely add only about 3,000 workers to the company’s current labour force of around 6,400.
The company last week reached a three-year wage deal with the National Union of Mineworkers, with increases per year ranging from 7 to 10%, depending on the category of worker.
“We have stability and certainty on costs over the next three years,” he said.