Strike afflicted and Anglo American owned Platinum miner, (Amplats) was capitalising its mechanised mines and might spend up to R100-billion (about K50 billion) on them plus Amandelbult in the next ten years, its chief executive officer, Chris Griffith told Mining weekly, Monday.
At the company’s announcement of highly acceptable financial results in the six months to June 30 when the company generated R3.7-billion in free operating cash flow despite the five-months strike, Griffith stated that running mechanised underground mines was by no means new to the company.
He added that it was also not because of the strike that the company was embarking on mechanisation, Griffith said in response to Cadiz platinum analyst Nic Dinham. The decision to dispose of the conventionally mined Rustenburg mine was similar to the decision taken, well ahead of the outbreak of strikes, to sell the Union mine.
Amplats had also decided exit the Pandora Joint Venture (JV) and was assessing the possibility of also selling out of the Bokoni JV, the Mining weekly, one of South Africa’s leading mining online publications reported. There was a possibility of the disposals being made by way of listings on public markets.
On mechanisation, Griffith said that Amplats was able to rely on eight years of mechanised mining experience at its Bathopele platinum mine and had decided to mechanise its expansions at Unki platinum mine, in Zimbabwe, and might also do so at the company’s Twickenham mine on the eastern limb of the Bushveld Complex, which was being redesigned for mechanisation.
The biggest single expansion of all was set to take place at the highly lucrative Mogalakwena openpit mine in Limpopo, which is already fully mechanised. Additionally, several of Amplats’ JVs were mechanised, including the Mototolo JV with Glencore and the Kroondal JV with Aquarius Platinum.
Plans were also under way for mechanisation at the Bafokeng Rasimone Platinum Mine and the Styldrift JVs with Royal Bafokeng Platinum.
The Bathopele platinum mine, near Rustenburg, is a trackless mechanised operation that mines the upper group two reef using low-profile (LP) and extra-low-profile (XLP) equipment suites. The mining layouts applied are bord-and-pillar in the LP section and breast mining in the XLP section.
“So, its not as if we have all woken up and said, there’s a difficult labour environment, let’s go and mechanise.
“As mining of the future happens, we must make sure that these mines are developed so that they can be more sustainable and actually also more socially acceptable to society,” Griffith is cited as saying by Mining weekly.
It was the record-breaking at mechanised mines and the drawdown of inventory through processing plants that ensured that Amplats was able to service every single platinum order made to it during what was South Africa’s longest-ever strike, as well as maintain a strong balance sheet.
The first two phases of the three-phase strategy to expand the Mogalakwena mine, which is expected to produce 350 000 oz in 2014, involves moderate capital expenditure and are almost certain to go ahead.
Steps are being taken to minimise the capital for the third phase to 600 000 oz/y, which will require simultaneous expansion of downstream processing plant and which initial studies indicate could cost as much as R30-billion to execute.
In the six months to June 30, Mogalakwena mined 38% more tons and produced the equivalent refined platinum production of 185 000 oz, a 12 percent increase on the corresponding period last year. The company is aware that the repositioning of its assets will create employee uncertainty and has undertaken to keep all the relevant key stakeholders informed of the process, the online publication adds in its report about Amplants.
On Amplats’ decision to dispose of assets and exit JVs, Griffith said that it was important to refer back to the decisions that the company made at the beginning of 2013, which were to avoid spreading scarce capital too thinly and failing to do justice to the operations that had the best potential returns.
Against that background, a decision was made to avoid spending capital at Union mine, in the same way as there had been an earlier decision to reduce the capital being spent at the Rustenburg operation – and rather invest into the better returning mechanised assets.
“Overall, we feel pretty comfortable that our next generation mines can be substantially more mechanised,” said Griffith.