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ARM keen to do more in platinum

African Rainbow Minerals (ARM) CEO Mike Schmidt talks to Mining Weekly Online’s Martin Creamer. Photographs: Duane Daws. Video and Video Editing: Darlene Creamer.

23rd September 2016

By: Martin Creamer

Creamer Media Editor

  

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Diversified mining company African Rainbow Minerals (ARM), which has reached agreement to increase its holding in the Two Rivers platinum mine to 54%, is keen on expand its overall platinum base still further.

The Two Rivers mine on the eastern limb of the Bushveld Complex achieved record production volumes of 400 722 oz of six element platinum-group metals in the 12 months to June 30.

“We like what we’ve got in platinum,” said ARM CEO Mike Schmidt, when questioned by Mining Weekly on the commodities the JSE-listed diversified mining company found most promising in the current commodities environment, “and, we think, based on what we are seeing now, of getting more platinum and building up that critical mass, provided the operation is on the right side of the cost curve, is mechanised and lends itself to mechanisation.”

ARM already has an effective 41.5% interest in the Modikwa platinum mine, where local communities own 8.5% and Anglo American Platinum the remaining 50%.

On the prospecting front, the company has 49% of the Kalplats platinum prospecting right, in which Platinum Australia holds 44% and Anglo American 10%, as well as the Kalplats extended area prospecting right, in which ARM and Platinum Australia are joint 50:50 holders.

Modikwa’s North shaft is being deepened and its new South Two shaft sunk.

Schmidt emphasised ARM’s ongoing full commitment to iron-ore and manganese and that the company had no intention of exiting copper as such, even though it was weighing its options at the Lubambe copper venture, in Zambia, where it is in joint venture with the giant Vale, of Brazil.

ARM reported a basic earnings loss of R565-million in the 12 months to June 30 on a R1 404-million first-half impairment of the Lubambe assets.

The global demand for high-grade manganese is increasing and ARM’s manganese in the Northern Cape, which is being modernised at a capital cost of R6.7-billion, has the flexibility of both high-grade and low-grade material and is in ramp-up from an existing capacity of three-million tonnes a year to a capacity of four-million tonnes a year.

“With emerging players mining a lot of low-grade material and flooding the market, we’ve seen volatility in prices.

“We’ve been very clear that we also need to exploit the higher-grade seam on the Nchwaning orebodies and overlaying the existing Seam 1; we also want to exploit the overlying Number 2 seam, which is also high grade. But it needs that whole infrastructure upgrade,” Schmidt told Mining Weekly.

Modernisation of logistics is dovetailing with Transnet demands and the implementation of automated articulated precision loading is part of the requirement of the State-owned rail transport enterprise, which is ramping up manganese export capacity at the Port of Ngqura, in the Eastern Cape.

The upgrade of the Nchwaning Two shaft is on schedule and sales volumes are being maintained from stockpiles during the shaft shutdown.

Growth in production volumes at the Black Rock mine will be aligned with market demand and logistics capacity.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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