JOHANNESBURG (miningweekly.com) – While black-empowered platinum miner Royal Bafokeng Platinum’s (RBPlat’s) results for the year ended December 31, 2012, could have been better, considering the past year’s circumstances, the company is cautiously satisfied with its performance, RBPlat CEO Steve Phiri said on Tuesday.

The platinum miner reported a 37.8% decline in headline earnings a share to 104c, compared with 167c 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 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 – and with serious consequences at some operations.

“Fortunately for us, the impact at RBPlat was modest as compared to the rest of the industry – with production losses of 70 000 t – and 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, industry-wide, potential further production disruptions did remain a concern, he told Mining Weekly Online.

“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 UG2 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 management would be a key success driver for the group in 2013. “We will be reviewing our capital expenditure and reducing it where possible, provided it does not place business sustainability at risk,” he said.

“There is no doubt we are facing a number of challenges. But there are
positives as well. 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 the increase in 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 due to our decision to defer certain capital expenditure. However, our BRPM replacement projects, the North shaft chairlift project and the Styldrift 1 expansion project are all progressing steadily and we have commenced a feasibility study for a standalone concentrator plant adjacent to Styldrift,” he said.

Meanwhile, he pointed out that platinum and palladium deficits were expected to continue to widen owing to constrained output from South Africa, which was expected to have a positive impact on metal prices.

SAFETY
Meanwhile, Phiri emphasised the company’s commitment to a policy of zero harm and stated that the group 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 removing employees from hazardous situations,” he said. 

“The 26% reduction in our lost-time injury frequency rate and 10% reduction in the serious injury frequency rate demonstrates the success of our safety programme,” he added.