Although JSE-listed Impala Platinum battled to take over its now acquired subsidiary Royal Bafokeng Platinum (RBPlat), much work is now needed to optimise the operations and get costs down, following double-digit cost increases for the business over the last year.

CEO Nico Muller explained during a media briefing on August 31 that RBPlat would require “dedicated attention” to extract the quality resource that it offers.

RBPlat is a mid-sized platinum group metals (PGMs) producer with mining and concentrating operations contiguous to the Impala Rustenburg portfolio on the western limb of the Bushveld Igneous Complex in South Africa.

The business is premised on shallow, low-cost and mechanised operations; however, what has transpired are constraints in processing throughput and recovery, notably at the Styldrift smelter.  

The Styldrift site is one of the last known high-grade blocks of shallow Merensky reef deposits. The current Merensky and upper group two resources support a life-of-mine in excess of 40 years.

Implats’ near-term focus at RBPlat is to optimise costs, improve metallurgical performance, complete a ramp-up at Styldrift, and plan and implement medium- and longer-term initiatives to realise the synergies provided by the acquisition.

In the second half of 2015, RBPlat made the strategic decision to defer ramp-up at Styldrift, owing to low PGM prices at the time. However, towards the latter half of 2016, the progress made at Styldrift, as well as basket price increases, allowed RBPlat to commit to the next phase of expansion, which ramped up the mine to 150 000 t a month. This milestone was achieved in October 2018.

At steady-state Styldrift can produce 320 000 oz/y of platinum, palladium, rhodium and gold (4E).

Factors affecting Styldrift’s performance over the last year include a lengthy Section 54 stoppage following a fatality, as well as poor productivity.

RBPlat’s cash cost per 4E ounce increased by 22% in 2022, resulting from inflation and lower production volumes at Styldrift.

Muller explains that the delay in finalising the RBPlat transaction, since Implats first offered to buy out all shares it did not own at the end of 2021, contributed to uncertainty and lower productivity.

Implats launched the acquisition of RBPlat in November 2021, with an offer of R90 in cash and 0.3 Implats shares per RBPlat share. Rival Northam Platinum also tried to take over RBPlat with an offer of R172 apiece, but subsequently pulled the offer and sold its shares in RBPlat citing PGM price considerations.

“There are fundamental technical weaknesses at the moment at both the processing plant, and particularly the new plant, Maseve, which never got going,” Muller notes.

The Maseve concentrator plant is northwest of the Bafokeng Rasimone Platinum Mine’s South shaft and to the south of Styldrift. The concentrator was upgraded to a capacity of 180 000 t a month in 2022, to process ores from the South shaft and Styldrift.

Muller adds that Implats will need to technically reorganise the way in which RBPlat is managed, especially with regard to preventive maintenance, spares sourcing and inventory management.

The fact that RBPlat is now incorporated into a larger company, which has a vast concentrator capacity and typical recoveries of 89%, bodes well for RBPlat’s future. RBPlat's operations currently have a recovery rate of 80%.

“I have no doubt the technical expertise of Implats will be able to restore recovery at RBPlat,” Muller states, adding that an optimised RBPlat and its assets will provide flexibility for the group, as well as an opportunity to drive down costs at group level.

Muller anticipates an optimisation of RBPlat's operations will take between 12 and 24 months.

Commenting on plans for a Styldrift II operation, Muller says the size, grade and shallow depth of the mineral resource characteristics of Styldrift II represent a significant investment opportunity of R20-billion, which Implats will only pursue later on.

The current price environment does not justify such an investment, particularly given the group’s existing extensive capital expenditure programme. “It will take a year or two to diligently update the feasibility study of Styldrift II,” Muller notes.

The mineral resources at Styldrift II currently comprises 59-million tonnes of Merensky reef at an average 4E grade of 7.7 g/t over a mineral resource width of 105 cm.

RBPlat conducted a detailed study and exploration drilling programme in 2010 and 2011, which resulted in the approval of a prefeasibility study for the deposit in 2015.

Securing outright ownership of RBPlat marked an important milestone for Implats, after a process that was lengthy and contentious.

“It creates the best possible chance of maximising value from this important acquisition — it enables sustainable socio-economic benefits for the Rustenburg region and its communities, secures employment, unlocks significant value from the neighbouring operations and contiguous orebodies at Impala Rustenburg, and secures the most significant source of global primary PGMs production,” Muller says.

He concludes that volume gains at RBPlat are vital to offset the inflationary pressures present in the PGMs industry and, in particular, at mechanised operations in the recent past, and, therefore, Implats’ technical teams are focused on optimising the assets of RBPlat as soon as possible.