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RBPlat warns of load-shedding impact as Q1 output falls 6% y/y

17th April 2015

By: Megan van Wyngaardt

Creamer Media Contributing Editor Online

  

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JOHANNESBURG (miningweekly.com) – JSE-listed platinum miner Royal Bafokeng Platinum (RBPlat) on Friday reported that its milled tonnes, for the quarter ended March 31, had increased by 6% to 540 000 t, with Merensky and upper group two (UG2) volumes up 2% and 58% respectively.

However, the built-up head-grade reduced by 10% to 3.87 g/t, negatively impacting on recoveries, with overall concentrator recovery ending 2% lower than for the first quarter of 2014.

This, combined with a negative pipeline-related ounce adjustment, accrued from 2014, resulted in the net platinum, palladium, rhodium and gold (4E) output reducing by 6% when compared with the first quarter of 2014.

The reduction in both the delivered and built-up head-grades was attributed to a 27% increase in the contribution of lower-grade on-reef Merensky development, mainly from Phase III and Styldrift I, to its overall run-of-mine tonnes.

This related to stoping production being negatively impacted by the safety stoppages imposed on the operation subsequent to a fatal accident, at its Bafokeng Rasimone platinum mine (BRPM) North shaft, in January.

Meanwhile, an increase in UG2 production, to mitigate the impact of the stoppages on overall production volumes, resulted in the net contribution to tonnes milled increasing to 27.2%.

“We are confident that grades will return to our guided range of 4.15 g/t 4E and 4.20 g/t 4E during the remainder of the year as Merensky stoping production normalises and UG2 volumes reduce to about 22% of production,” the company said in a statement.

RBPlat highlighted that, given the current State-owned power provider Eskom’s generation constraints, power management had been a key operational focus to reduce the impact of load-shedding on production.

“Our operational strategy involves load reduction by restricting metallurgical operations, specifically crushing, to enable underground operations to continue unaffected as and when load curtailment is implemented.

“To date, this strategy has proven successful in managing the intermittent stage 1 and 2 load curtailments which have characterised the quarter. Load curtailments have been implemented 11 times this quarter, equating to 154 hours of crusher plant downtime without negatively impacting on output.

“However, should we encounter continuous stage 1, 2 or 3 load curtailments going forward, production could be impacted,” the miner noted.

FUNDING
Cash operating costs for the quarter increased by 18%, in line with mining inflation, and there was a 6% increase in production volumes when compared with the first quarter of 2014.

The cash operating cost per tonne milled ended 10.9% higher at R1 121 when compared with the same period in 2014, while the cash operating cost per platinum ounce increased by 25.7% to R16 153 owing to the 6% lower platinum ounce production.

Managing unit cost increases to below mining inflation remained a key focus area for the company, while ensuring planned grades were achieved and maintained.

Capital expenditure (capex) for the quarter increased by 66% to R508.8-million, with expansion capex increasing by 78% to R445.2-million, in line with the Styldrift I project progress and associated construction activities.

Replacement capex increased by 29% to R42-million, which was mainly attributable to construction activities on the North shaft Phase III decline extension project.

Stay-in-business (SIB) capex reduced by 11% to R21.7-million owing to variations in RBPlat’s SIB project pipeline schedule.

PROJECTS
Steady progress was made on all mining and infrastructure construction related activities at Styldrift I, with minimal disruption to shaft equipping activities as a result of terminating the contract in March with Shaft Sinkers, the principal sinking and development contractor on the project.

Mining and infrastructure had progressed to 54% complete with the Main shaft remaining on schedule for commissioning during the second quarter of this year, while concentrator infrastructure related construction activities, which included the upgrade of the current BRPM concentrator and construction of an overland conveyor belt from Styldrift to BRPM, continued to progress according to plan.

Capex for the quarter amounted to R434.98-million, bringing total expenditure and total commitments on the project to R4.25-billion and R5.07-billion respectively.

The total expenditure for the project remained forecast at R2.41-billion, including the concentrator upgrade, contingencies and escalation and is aligned to RBPlat’s estimate at completion of R11.01-billion.

The BRPM Phase III project, which entailed the extension of the North shaft decline access infrastructure and associated reef infrastructure from level 10 to the mine boundary, level 15, also continued to progress well.

The overall project at the end of this reporting period was 76% complete, which is 7% ahead of schedule. Project expenditure for the quarter amounted to R40.7-million, bringing the total project expenditure to date to R830.14-million.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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