Platinum production for Royal Bafokeng Platinum (RBPlat) fell in the quarter to the end of September as unreliable power supply by Eskom impacts mining operations in South Africa, worsening an already problematic operating environment.
Global supply chain disruptions and high inflation are the other challenges that mining companies in South Africa are facing. RBPlat says the impact of these headwinds have now been worsened by recurring power supply shortfalls by Eskom.
“The third quarter operating environment continued to be characterised by high inflationary pressures due to global supply chain disruptions and market volatility stemming from the geopolitical instability caused by the Russia/Ukraine conflict, the longer-term impact of the Covid-19 pandemic and unreliable power supply,” RBPlat said in a third quarter trading update published on Friday.
RBPlat is on the radar of Impala Platinum, which has been bumping up its stake in the platinum producer. Implats currently controls about 41% of RBPlat and is eyeing to raise its interest to 42% gain majority control of the miner.
RBPlat’s overall production performance for the quarter “was below expectation”, it said, with total tonnes hoisted and milled decreasing by 10.2% and 4.9% to 1 203kt (kt = equal to 1 000 tons) and 1 187kt, respectively.
4E metals in concentrate production for the quarter period also dipped by 6.2% to 119.1koz. The company's share price on the JSE was, however, 0.8% stronger after the release of the quarterly trading update at R143.2 per share.
A stronger performance from the BRPM operation, where total reef tonnes hoisted for the reporting period were 4% stronger and tonnes milled increased 9.6% higher, was unable to offset the overall decline in production performance for the platinum group metals miner.
With built-up head grade marginally higher at 3.96g per tonne, Bafokeng Rasimone Platinum Mine (BRPM) had increased volumes that fed into 4E ounce production for the quarter rising by 12% to 78.1koz.
RBPlat’s concentrating operations saw total tonnes milled for the period decrease by 4.9% to 1 187kt.
Its overall concentrator performance “was impacted by increased load curtailment events experienced during the quarter and reduced Maseve throughput related to the grind and load optimisation processes required” to ensure the optimal configuration of the newly mill.
Further to the dip in production performance, RBPlat’s operations were impacted by an increase in year-to-date unit costs which surged by some 9.6% to R1 689 per tonne and by 8% to R16 556 per 4E ounce.
The increase in cash costs has been attributed to increased mining consumables, secondary support and trackless fleet maintenance costs and on-mine inflation.
The lower milled volumes and grade also resulted in unit cash cost increases for the quarter of 47.3% to R2 809 per tonne milled and by 61.3% to R30 561 per 4E ounce.
The company closed the period under review with a net cash position of R5.1 billion compared to the previous quarter’s cash position of R4.8 billion. Cash movements for the quarter period under review included the payment of approximately R711 million for the interim dividend.
In addition to its net cash holdings, RBPlat had an additional R3 billion of debt facilities available.
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