Black-controlled JSE-listed Royal Bafokeng Platinum (RBPlat), which surprised on the upside with a solid performance, in addition to industrial peace in the six months to June 30, has also managed to clip more than R400-million off the capital expendi- ture (capex) required for the enlarged Styldrift growth project, which is destined to be a high-powered 4 000-employee mechanised operation.

RBPlat CEO Steve Phiri told Mining Weekly last week that the company was getting more project for less money as a result of project costs declining since the 2008 boom, as well as technological advances.

The original R11.8-billion capex estimate is now down to R11.39-billion.

“That gives us a saving of more than R400-million,” said Phiri, whose company was also on the receiving end of a diligent performance from its workforce that has been operating peacefully in an otherwise hostile platinum belt.

RBPlat’s balance sheet remains ungeared with cash and near cash of R992-million.

The lower-capexed operation will have a deeper shaft than stipulated in the initial plan and will be mined by a still-to-be-ordered trackless equipment fleet.

“It’s mechanised, which reduces costs exponentially,” Phiri said, adding that the optimisation effort would also add 1 000 jobs to the initially envisaged labour complement of 3 000.

Mechanisation has been facilitated by reef thickness, which, in some areas, is up to 2 m, as well as orebody uniformity, which lends itself to bord-and-pillar mining.

RBPlat COO Nico Muller said at the company’s presentation of results that the Styldrift project schedule had been extended by 13 months, with the production ramp-up beginning in July 2015 and advancing to a steady state of 230 000 t/m from June 2018.

The new project schedule reflects progress of 32.2%, which is 1% ahead of schedule.

“I’m very confident that we’ll be able to reflect a significant saving against the original R11.8-billion budget on project completion,” Muller said.

The company is well placed to fund Styldrift as a result of its working capital facilities increasing to R458-million and the Nedbank revolving credit facility being increased to R1-billion.

The future processing solution is still under discussion, with options including a joint concentrator or tolling to save more capital and operating costs.

The prefeasibility study for Styldrift Two will be completed in the last quarter of 2014, with Styldrift One conceivably providing early mining access from a decline shaft.

Styldrift Two represents 40% of the company’s resource and contains gently dipping high-grade Merensky reef with a low level of structural complexity.

“Styldrift Two really represents the last quality untouched Merensky asset,” Muller added.

The opportunity of eventually bringing Styldrift Four into the life-of-mine profile is under investigation.

Bafokeng Rasimone Platinum Mine

Improving operational flexibility by increasing immediately stopable (IMS) ore reserves has been an ongoing focus at RBPlat’s Bafokeng Rasimone platinum mine (BRPM) and has enabled the normalisation of development rates, benefiting both grade and operating costs and contributing to improved safety performance and labour efficiencies.

Improving IMS ore reserves has also enabled a shift in strategic focus to cost management, covering several key areas, including labour, contractors and high-cost consumables.

This contributed to a below-inflation increase of 2% in total operating costs and unit costs for every platinum, palladium, rhodium and gold (4E) ounce.

Labour costs reduced by 11% as the labour force was reduced from 6 744 to 5 984, which contributed to improved efficiencies.

Ounce output increased 1.1% to 130 278 oz of 4E and 84 628 oz of platinum.

Overall tons milled were down 3.8% owing to an unintended shortfall in sweepings and lower reef development rates.

This was offset, however, by a 5.8% increase in built-up head grade resulting from lower reef development dilution, no processing of low-grade surface stockpile and improved mining controls.

A 4E built-up head grade of 4.28 g/t was achieved.

The third phase of the BRPM Merensky replacement project involves the extension of the North shaft’s Merensky decline from 11 level down to 15 level at the mine boundary.

Project completion is forecast at two months ahead of schedule in 2017. Project expenditure to date stands at R489-million against a budget of R603-million.

Revenue increased by 18.6% to R1.5-billion, reflecting a rand basket price increase of 17% to R18 294 a platinum ounce in the first half of 2013, which was the result of the weakening of the rand against the US dollar.

Total cash operating costs increased by 2% to R988-million, mainly as a result of cost containment and reduced milled tons.

The cash operating cost of every platinum ounce was 1.3% higher at R11 756/oz.

The gross profit margin improved by 68.0% to 21.0%, increasing earnings per share from 43c to 87c – a 103% increase.

Total BRPM capex reduced by R75-million (14.6%) to R446-million as a result of lower expenditure on stay-in-business and replacement projects, and higher expenditure on expansion projects and drilling (R61-million).

Full-year production of 2.3-million tons milled is expected with an upper group two contribution of up to 20%.

Tax Dispute

Royal Bafokeng Resources Holdings has received notice that the South African Revenue Services (Sars) intends to disallow interest on share- holder’s loans amounting to R586-million previously deducted and allowed by Sars in the 2008 and 2009 tax assessments.

The company, which has enlisted independent advice, says it is confident about defending the Sars case.

Worker Killed

BRPM’s Robert Mohoanyane lost his life during the collapse of a temporary platform at the South shaft’s Level 9.

The total number of injuries reduced by 36% and two-million fatality-free shifts were recorded.

The total number of injury-free days increased from 116 days in the first half of last year to 130 days this year.