South Africa’s Platinum Group Metal (PGM) miners are demonstrating resilience in the face of numerous challenges, pushing forward with the development of new mines despite obstacles such as electricity shortages and logistical bottlenecks. These efforts were underscored during a recent panel discussion at the PGMs Industry Day conference held on April 10.
Thando Mkatshana, CEO of ARM Platinum, emphasized the critical importance of managing costs effectively in the current economic climate. He highlighted projects like Modikwa, Two Rivers, and Nkomati as examples where responsible cash deployment strategies are being employed to navigate through challenges and ensure sustainability. Mkatshana emphasized the need for a disciplined approach, stating, “If costs sit in the lower half of the cost curve, then a project should be able to ride the waves [of commodity cycles]. However, the current environment calls for responsible and disciplined deployment of cash.”
At Two Rivers Platinum Mine, a flagship operation for ARM Platinum, efforts are underway to address challenges such as declining ore grades. Mkatshana outlined the company’s strategic approach, explaining, “We are now finishing these projects, but we are taking a responsible approach, including planning to slow down the developments in such a way that they can be ramped up when the market turns.”
In addition to its existing operations, ARM Platinum acquired the Bokoni mine from Anglo American Platinum two years ago. Despite market conditions, the company is moving forward with the development of this high-quality asset. Mkatshana noted, “We did start some of the initial phases last year, and have started to develop a 60,000 t a month operation, albeit mainly to manage the maintenance costs of the mine.”
Meanwhile, Ivanhoe Mines, a diversified energy metals-focused mining company, is leveraging its experience from projects like the Kamoa-Kakula Copper Complex in the Democratic Republic of Congo to inform its investment in the Platreef PGMs/nickel mine in Limpopo, South Africa. Marna Cloete, president of Ivanhoe Mines, emphasized the phased approach being taken to derisk the Platreef project and optimize production. “To derisk the Platreef project, we are developing it in phases,” she said. “Phase 1 will enter production next year and then ramp up quickly to Phase 2, which will result in production of more than 400,000 oz/y.”
While the pricing of commodities and capital funding present challenges, logistical constraints and energy costs are among the most significant hurdles facing PGM projects in South Africa. Schalk Engelbrecht, a finance executive at Platinum Group Metals, highlighted the importance of securing off-take agreements and exploring alternative energy solutions. “Further, one of the reasons we are pursuing the possibility of building a smelter in Saudi Arabia is because of how the economics work,” he explained.
The development of new PGM mines also faces regulatory challenges and operational complexities. Roger Baxter, non-executive chairperson of Southern Palladium, discussed the Bengwenyama project, which presents an opportunity to develop a tier-one project with significant economic potential. However, logistical challenges, energy constraints, and regulatory issues pose significant hurdles. “The project economics have improved following the detailed scoping study,” Baxter said, “but the difficulties and opportunities are the same as developing other PGM projects in South Africa.”
Despite these challenges, South Africa retains the capability to build new PGM mines and complete large mining projects. However, competition for skilled labor and logistical constraints remain significant concerns. “While South Africa has the capabilities, it is not going to be at normal costs,” emphasized Mkatshana.
In conclusion, the resilience and determination of South Africa’s PGM miners are evident as they navigate through challenges and pursue opportunities for growth and innovation. With a concerted focus on managing costs, derisking projects, and exploring alternative energy solutions, the industry is poised to overcome obstacles and maximize the potential of the country’s PGM sector for sustainable growth and development.
Source: Mining Weekly
