A new chrome recovery plant has been commissioned at Anglo American Platinum’s (Amplats’) Amandelbult mine, in Limpopo province.
The chrome plant, which cost R400-million, should generate additional free cash flow at current prices of between R350-million and R400-million a year.
Built on schedule and within budget, the plant should reach steady-state production by June 2017.
“This is an example of the value we’re creating from our disciplined capital allocation,” says Amplats CEO Chris Griffith.
The company is continuing to advance low capital expenditure (capex), fast payback projects that release value from existing assets and from the full metal stream, which, in Amandelbult’s case, includes chrome.
According to the scoping study, the project was motivated by the suboptimal dumping of chrome-containing upper group two (UG2) tailings.
Amplats has a number of what it describes as “high-value growth projects” in the bottom half of the industry cost curve.
Two others that have received “value-accretive project capital” this year, in addition to the Amandelbult chrome plant, are the Modikwa UG2 project, on the eastern limb of the Bushveld Complex, and the Bathopele Phase 5 project, a UG2 project on the western limb of the Bushveld Complex.
However, given current market conditions, most project capital decisions are being delayed until after 2017 – and then only if the market demands the metal and the Amplats balance sheet can accommodate the project.
“We are able to maintain our production profile through 2020 without any major ore replacement expenditure,” says Amplats CFO Ian Botha.
Capex guidance for 2016 has been slightly reduced to between R3.5-billion and R4-billion from between R3.7-billion and R4.2-billion.