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Exploring New Horizons: Insights from PGMs Industry Day 2024

Exploring Challenges and Opportunities in Opening Fresh PGM Mines

by Adenike Adeodun

The 7th edition of the PGMs Industry Day conference was held on April 10 at the Johannesburg Country Club, where experts discussed the complex world of the South African platinum group metals (PGMs) industry. The discussion was about the potential of opening new PGM mines. A panel led by James Smith, CEO of DRA Global, opened attendees’ eyes to the opportunities and challenges of building new mines.

One of the critical aspects highlighted by Marna Cloete, President of Ivanhoe Mines, was the importance of adopting a multigenerational perspective. Cloete cited the Platreef PMG-Nickel project as an example of a forward-thinking approach to the industry. The phased development strategy of the project mitigates risks while maximizing returns. The approach used by the Platreef PMG-Nickel project opens the way for an effortless move to a sustainable economy.

The Platreet Project was not without its own difficulty. Cloete highlighted the range of obstacles faced, from fluctuating commodity prices to funding constraints. Specifically, the bias towards gold-focused investments in certain markets has threatened PGM projects. Nonetheless, project teams have demonstrated resilience and flexibility in overcoming obstacles by exploring innovative solutions, such as alternative liquefying locations in Saudi Arabia.

During the panel session, Schalk Engelbrecht, a Finance Executive at Platinum Group Metals, also highlighted several challenges faced by the mining industry. Three main challenges include determining the right pricing, adopting the gold standard for the poor, and the possibility of withholding smelters in Saudi Arabia.

Thando Mkatshana, the Chief Executive of ARM Platinum, also talked about how the Two Rivers projects can be optimized. The project involves evaluating potential shareholders as its portfolio constitutes less than 50% of its total acquisition. However, the current economic environment has resulted in a determination for discipline and raised challenges in acquiring funds.

The Chairman of Southern Palladium, Roger Baxter, emphasized the significance of capital investment and strategic restructuring to effectively endure market cycles. By giving priority to long-term projects and promoting collaboration between businesses and governments, stakeholders can reduce risks and make the most of opportunities. This thought aligns with the need for organized cooperation across sectors, as seen in initiatives such as the Market Development Corporation (MDC).

Baxter mentioned that the Bengwenyama project, developed by Southern Palladium, offers a chance to build a tier-one project with an ore body depth of 500 meters and a lifespan of 36 years. However, the company faces challenges in terms of energy and logistics restrictions, crime, and regulatory issues. The project’s economics have improved after a thorough scoping study and are currently in a pre-feasibility study (PFS). The project is expected to generate $1 billion in pre-tax earnings before interest, taxes, depreciation, and amortization.


Source: Mining Review

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