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Northam board approves renewable energy projects plus hydrogen project

Creamer Media screenshot of Alet Coetzee, CFO of Northam Platinum, during presentation of annual results on 30 Sept 2021

Northam Platinum CFO Alet Coetzee

Photo by Creamer Media

1st October 2021

By: Martin Creamer

Creamer Media Editor

     

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JOHANNESBURG (miningweekly.com) – The board of platinum group metals (PGMs) mining company Northam Platinum has given its approval for the building of three renewable energy projects at three of the company’s mines plus a hydrogen project at one of them.

Northam Platinum CFO Alet Coetzee said this week that board approval had been given for a 10 MW solar power plant at the Zondereinde PGMs mine in Limpopo and for two smaller renewables plants at the Booysendal and Eland mines.

“We’ll also do a very small hydrogen project at Eland,” said Coetzee in response to Mining Weekly during a media roundtable following the Johannesburg Stock Exchange-listed company’s presentation of record financial results for the 12 months to June 30.

“As a producer of green metals, we do believe that we should be looking at our carbon footprint. So, a couple of months ago, as part of our business plan initiatives, the board approved these three small renewable energy projects.

“I’ve got to put a caveat on that. We actually did the work and all the preparation before the change in legislation where previously there was a 10 MW limit and buffer,” she said, alluding to the new 100 MW limit.

“We’re also looking at various other potential opportunities, including wind farm possibilities. It’s still early days for us, but it’s definitely on our radar.

“You’ll see that Eskom is on our risk register, both in terms of costing as well as availability. So, it’s something that we’ll be addressing in the next couple of years across the group,” said Coetzee.

“We can’t replace Eskom. We can supplement Eskom with the green technologies, in particular photovoltaic (PV) solar power,” said Northam CEO Paul Dunne.

“Wind has some potential but it’s difficult because of the difference in geographies. Eskom remains a worry for us and I think mid-decade in particular, we’re extremely concerned about the availability of power from Eskom and, of course, the cost of that power.

“There’s quite a strong business case on PV in particular. If we self-build, and we’ve got ground for the 10 MW plant at Zondereinde, we could probably get a four-and-a-half-year payback on that project, which is good. It’s not a long-dated payback. It’s reasonably short and that means for us that we can expand that 10 MW to something bigger over time,” said Dunne.

“We’ve got the real estate at all our operations to do that,” added Coetzee.

On decarbonisation plans, Dunne said: “We see a lot of potential for electrification of slow-moving vehicles, very specifically bolters and drill rigs.”

The Zondereinde mine is an established, conventional, long-life operation which mines upper group two (UG2) and Merensky ore and produces approximately 300 000 oz of refined four element (4E) PGMs from own operations yearly. The mine is located on the northern end of the western limb of the Bushveld Complex, near the town of Thabazimbi.

In December 2017, Northam acquired the ground adjacent to Zondereinde’s western boundary from Anglo American Platinum. The Western extension acquisition provides access to additional Merensky and UG2 reef and extends the life of mine (LoM) to beyond 30 years.

The shallow, mechanised, room and pillar Booysendal UG2 North mine is located near the town of Mashishing (formerly Lydenburg) on the eastern limb of the Bushveld Complex.

Booysendal North mine has an LoM of some 25 years. The 105-million-ounce orebody at Booysendal lends itself to brownfield expansion opportunities, which are currently being established on the property. These include a deepening project at the existing UG2 North mine, the Booysendal Merensky North mine and the new Booysendal South mine.

The Eland PGMs and chrome mine is located on the south-eastern limit of the western limb of the Bushveld Complex. It comprises two mining rights and contains a resource estimated at 21.3-million ounces of PGMs with an average in situ 4E grade of 4.4 g/t.

Northam’s normalised headline earnings soared by more than 215% to R10.9-billion in the 12 months to June 30. Its earnings before interest, taxes, depreciation and amortisation (Ebitda) were 176% higher at R16.7-billion and revenue 83% higher at R32.6-billion. The Ebitda margin rose to 51% from 33.8% in the 2020 financial year.

Operating profit was 203% higher at R16.1-billion and profit after tax hit the R9.4-billion mark. Net debt is at R3.7-billion.

Edited by Creamer Media Reporter

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