Black-empowered platinum producer Royal Bafokeng Platinum’s (RBPlat’s) commitment to a policy of zero harm was emphasised by CEO Steve Phiri at the company’s yearly results presentation, held in Johannesburg last week.
Phiri stated that RBPlat was continually liaising with the relevant stakeholders to improve its safety performance.
“Our safety strategy is aimed at developing a resilient culture of safety by protecting employees from hazardous situations,” he said.
“Safety should always be a priority as it deals with the lives of people. It is also important for the sustainability of the business. If a company operates unsafely and there is an accident, the operation is shut down, which impacts on production,” Phiri told Mining Weekly.
“The 26% reduction in our lost-time injury frequency rate and the 10% reduction in the serious injury frequency rate demonstrate the success of our safety programme,” he added.
Meanwhile, Phiri said during the presentation that RBPlat’s results for the year ended December 31, 2012, could have been better, but considering the circumstances of the past year, the company was satisfied with its performance.
The platinum miner reported a 37.8% decline in headline earnings a share to 104c, compared with 167c a share the year before, while earnings before interest, tax, depreciation and amortisation, as a percentage of revenue, decreased to 22.1%, mainly owing to reduced sales volumes and an increase in cash operating costs.
The group’s net revenue decreased by 3.7% to R2.86-billion, owing to a 4.4% drop in volumes produced, and it recorded only a marginal increase of 0.7% in the rand basket price of platinum to R16 404/oz, compared with R16 282/oz in 2011.
“Aside from the global woes, at home, the industry was plagued in the second half of the year by industrial unrest – with serious consequences at some operations.
“Fortunately for us, the impact at RBPlat was modest with production losses of 70 000 t, compared with the rest of the industry. We believe this is mainly owing to our policy of open engagement and, assisted by other parties, a peaceful resolution of the workforce’s grievances.
“Overall, employee productivity improved slightly by 2% to 30 t per employee and we have designed our incentive scheme to promote productivity in the longer term,” Phiri said.
However, the possibility of further production disruptions industrywide remained a concern, he tells Mining Weekly.
“There have been indications that the mining industry is still on unstable ground and we can only hope that some of the disruptions we have seen thus far are not an indication of what is going to happen in 2013.”
Safety stoppages for the year resulted in production losses of 117 000 t, in addition to the 70 000 t of production lost as a result of labour unrest.
This resulted in a 4% decline in Merensky tons milled to 1.96-million tons.
The lower Merensky output was offset by a 61% increase in upper group two production to 417 000 t and the treatment of about 60 000 t of low-grade surface stockpile. The net result was a 3% increase in total tons milled to 2.37-million tons.
Operating costs were impacted on by mining inflation of 5.6% and, although RBPlat reduced its operating labour costs by 8% over the previous year, in line with its business optimisation strategy, labour still represented a significant portion of its operating costs at 62%.
According to Phiri, cost man-agement would be a key success driver for the group in 2013. “We will be reviewing our capital expenditure and reducing it where possible, provided this does not place business sustainability at risk,” he said.
“There is no doubt that we are facing several challenges, but there are
positives. Styldrift 1 remains on schedule and we expect to begin production in 2015, ramping up to full production within three years.
“At Bafokeng Rasimone Platinum Mine (BRPM), we have significantly improved our operational platform by increasing the stopable reserve face length, among other things, and we will leverage this strength through our ongoing focus on stakeholder engagement, particularly with regard to operational disruptions.”
Phiri was confident that the company’s strategic goals remained relevant and that production levels and head grade could be maintained, in line with forecasts.
“Some of our projects have been put on hold because of our decision to defer certain capital expenditure. “However, our BRPM replace-ment projects, the North shaft chairlift project and the Styldrift 1 expansion project, are all pro-gressing steadily and we have started a feasibility study for a standalone concentrator plant adjacent to Styldrift,” he said.
He pointed out that platinum and palladium deficits were expected to continue widening owing to constrained output from South Africa, which was expected to have a positive impact on metal prices.