The completion of the definitive feasibility study (DFS) for the first phase of production at platinum-group metals (PGMs) miner Ivanhoe Mines’ Platreef project, on the northern limb of South Africa’s Bushveld Igneous Complex, is another key milestone in Ivanhoe’s plan to transform the discovery into one of the pre-eminent South African producers of PGMs, says executive chairperson Robert Friedland.
He notes that Platreef is a massive, high-grade, long-life, Tier 1 deposit that will produce a suite of vital metals, many of which are essential to sustaining the urbanising planet. “The nickel and copper by-products are essential in the electric car revolution and the platinum and palladium are equally vital for hydrogen fuel cell technology and catalytic converters to clean the air.”
Ivanhoe Mines now has a clear and defined path mapped out to move forward to initial production and to subsequent phases of development, says Friedland. “We are confident that the Platreef project will benefit all our stakeholders, including the 20 local communities that are our equity partners, for generations to come.”
Platreef project MD Dr Patricia Makhesha points out that the company is proud to have shared its almost 20 years of exploration and development achievements at Platreef with supportive stakeholders. Further, Makhesha posits that these stakeholders, which include more than 150 000 local Mokopane area residents, view international investment and professionally managed development of natural resources as key to unlocking widely shared opportunities and prosperity.
The Platreef project, which contains the Flatreef deposit, is located on the world’s premier platinum-producing region.
Ivanhoe Mines plans to develop the mine in three phases. The first involves constructing an underground mine, a concentrator and other associated infrastructure to support an initial production rate of four-million tonnes a year by early 2022. As Phase 1 is being developed and commissioned, there will be opportunities to refine the timing and scope of subsequent phases of expanded production.
The second phase involves doubling production to eight-million tonnes a year and the third phase the expansion to steady-state production of 12-million tonnes a year.
Friedland says the new study demonstrates Platreef’s robust economics, which were first highlighted in the March 2014 preliminary economic assessment and further reinforced by the January 2015 prefeasibility study (PFS).
The DFS has now confirmed the technical viability of what is projected to be the world’s lowest-cost and, in time, largest, single primary producer of PGMs.
“Despite lower metal prices used in the DFS, compared with the 2015 PFS, we have maintained the excellent economics of the Platreef project, owing, in part, to the mine optimisation work completed with assistance from industry-leading experts such as Whittle Consulting, of Melbourne, Australia. Even at today’s spot metal prices, the Platreef project would generate an operating margin in excess of 40%,” he adds.
Key DFS Features
The DFS indicates mineral resources containing an estimated 41.9-million ounces of platinum, palladium, rhodium and gold (4E PGMs), with an additional 52.8-million ounces of 4E PGMs in inferred resources.
It highlights an enhanced mineral reserve containing 17.6-million ounces of 4E PGMs – an increase of 13% – following stope optimisation and mine sequencing work.
The DFS indicates a planned initial average yearly production rate of 476 000 oz of 4E PGMs plus 21-million pounds of nickel and 13-million pounds of copper.
An estimated preproduction capital requirement of about $1.5-billion is indicated, at an exchange rate of R13 to $1.
The DFS indicates that Platreef will rank at the bottom of the cash-cost curve, at an estimated $351/oz of 4E PGMs produced, net of by-products and including sustaining capital costs, and $326/oz before sustaining capital costs.
Ivanhoe Mines indirectly owns 64% of the Platreef project through its subsidiary, Ivanplats, and is directing all mine development work. The South African beneficiaries of the approved broad-based, black economic-empowerment structure have a 26% stake in the Platreef project. The remaining 10% is owned by a Japanese consortium comprising global diversified trading company Itochu Corporation, Japan Oil, Gas & Metals and global engineering company JGC.
Ivanhoe Mines is focused on advancing its three principal projects in Southern Africa – mine development at Platreef, mine development and exploration at the Tier 1 Kamoa-Kakula copper discovery on the Central African Copperbelt, in the Democratic Republic of Congo (DRC), and upgrading the historical, high-grade Kipushi zinc-copper-silver-germanium mine, which is also on the Copperbelt in the DRC.