JOHANNESBURG (miningweekly.com) – The life-of-mine breakeven cost of platinum miner Platmin's new Pilanesberg platinum operation was from $600/oz to $650/oz at current exchange rates and rand-dollar prices, Platmin executive chairperson Keith Liddell told Mining Weekly Online at the inward listing of Platmin on the JSE on Wednesday, which brings an investment of R1,85-billion to South Africa.

“We’re very well positioned cost-wise, and that comes from us having an openpit mine,” Liddell said of the 16-year-life operation, which is poised to begin yielding positive cash flow before the end of this year.

Liddell said that Platmin’s Pilanesberg platinum mine in South Africa’s North West province was on track to produce at a rate of 250 000 oz/y from the fourth quarter of this year.

“We don’t have costly underground operations. All of our ounces come from an openpit, and that’s much cheaper mining. It’s the rand profit margin that we focus on, given that most of our cost is in rands," he said.

The way to beat the low rand metal prices was to contain costs and ensure that production was optimal: "That's the way I've successfully brought platinum operations into production, and that’s the way we are bringing Pilanesberg into production," he added.

The inward JSE listing of the company, in which Brian Gilbertson’s Pallinghurst has a 51% interest, augments its presence on TSX and Aim, and has given the 350 000-strong Bakgatla Ba Kgafela community a platform from which to participate at listed ownership level.

Being mined at Pilanesberg, Liddell said, was a basket of platinum-group metals that included platinum, palladium, ruthenium, iridium, rhodium, copper and nickel, the bulk of the revenue coming from platinum.

“We’ve just had some research done and the projections are that by 2011, the world production of cars will be as it was in 2008, when platinum was priced at over $2 000/oz.

“What we’ll see, is the stocks of cars depleting over the next 12 months, particularly led by third-world countries, particularly China. We are still going to see the China factor coming back into the platinum prices,” Liddell forecast.

“Don’t forget, that platinum's a green metal, and when you look at the pollution of Chinese cities, they have to have autocats on their cars.

“Palladium is going to be a metal that really comes up over the next 12 to 18 months, probably before the platinum price starts to move. Palladium has been destocked a little more than platinum,” Liddell says.

On listing on the JSE, he said that the JSE listing was part of the funding arrangement with Pallinghurst: "In the near future, the Bakgatla community will move up from the South African subsidiary into Platmin, so that we all sit at the same table as shareholders."

Liddell told Mining Weekly Online that Platmin’s priority was to ensure that the three process streams at Pilanesberg were yielding at full-ounce output.

“They’re already running at full tonnage production. As we mine deeper and our recoveries come up, then we’ll move to full-ounce production of 250 000 oz a year, which puts us in a midtier producer position,” Liddell added.

Besides the Pilanesberg mine, he said that Platmin had a pipeline of other shallow long-life projects that would be developed when market conditions supported additional platinum supply.

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