Northam Platinum to create 6 500 new jobs in growth thrust

Paul Dunne

Northam Platinum CEO Paul Dunne presented financial results covered by Mining Weekly Online’s Martin Creamer. Photographs: Duane Daws. Video and Video Editing: Nicholas Boyd.

Paul Dunne

Photo by Duane Daws

23rd February 2018

By: Martin Creamer

Creamer Media Editor


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JOHANNESBURG ( - Platinum group metals (PGMs) mining company Northam, which is in a strong organic and acquisitive growth phase, will be generating 6 500 new mining jobs in the next four to five years, which dovetails with President Cyril Ramaphosa's 'sunrise' aspirations expressed in his well-received State of the Nation Address.

A current employer of 12 000 people, including contractors, Northam is in the midst of spending R5.5-billion capital on strategically timed, on-track growth projects, which are combining with acquisitive growth to reposition the company as a million-ounce supplier of PGMs, used to clean the air of all the world's major cities and adorn as a precious jewellery metal of choice. (Also watch attached Creamer Media video).

Speaking to journalists at a media roundtable following the company's announcement of normalised headline earnings of R189-million for the six months to December 31, Northam CEO Paul Dunne said the company would definitely be employing more people at all of the operations, with the possible exception of Booysendal North, which is already at full nameplate capacity.

Preparation to access the newly acquired Tumela Block has already created an additional 357 jobs and more job creation is on the way as the Zondereinde mine ramps up to 350 000 oz a year.

A combination of 3 000 new permanent and project jobs are also on the way at the Booysendal South mine.

If the company does choose to restart the recently acquired rhodium-dominant Eland mine in the Brits area, another 3 000 people stand to be employed.

While the stronger rand is making it more difficult for the mining industry, Dunne points out that in the medium-term to long-term it will mitigate against the importation of inflation.

"Quick changes do make it difficult for miners to adapt but we do think that, because of the concentration of platinum production in South African, you get a corresponding movement in the dollar for rand strength.

"So, there's a direct linkage between the metal prices in dollars and the rand/dollar exchange rate, which, over time at least, does seem to balance itself out," Dunne said in response to Mining Weekly Online.

In this financial year (FY), which ends in June, Northam will be spending R3.8-billion capital in a combination of acquisition and project development outlay.

In financial year 2019, the company is planning to spend capital of R1.9-billion, in financial year 2020, R1.5-billion and beyond that sustaining capital expenditure of R1-billion.

"We're effectively, by employing that capital, doubling the size of the company," Dunne said.

The recycling business in Croyden, Pennsylvania, in the US, acquired in September for $10.7-million, is seen as providing a low-cost entry into a key supply segment of the PGM market, as well as becoming a source of feed material for the second furnace at Zondereinde, which has been commissioned as part of a R900-million smelter expansion programme.

"The material that we target will go through the Zondereinde furnace," said Dunne, who regards recycling as an essential segment of the PGM market.

"These metals are catalysts, which by definition do not get changed during the course of the reaction, and can, therefore, be reworked," Dunne commented.

Northam is in the process of doubling in size at a time of the industry not mining anywhere near the forecast demand of nine-million ounces by 2025, the nominal global demand quantum based on a modest compound annual growth rate of only 1.5%.


In the half-year, refined metal production of 246 473 oz was up, but sales volumes in the period were lower, reflecting the continued build-up of inventory ahead of the new furnace commissioning.

The lower volumes and stronger rand resulted in sales revenues dropping marginally to R3.4-billion.

US dollar price increases for palladium and rhodium were insufficient to offset lower revenue from platinum, which constitutes 60% of the production basket.

Operating costs for mining and concentrating increased by 10.6% to R2.4-billion and 12.1% to R347-million on labour and power cost increases as well as the expenditure associated with commissioning the dense media separation plant at Booysendal.

The group operating profit was down by 3.8% to R338.8-million, with the operating margin largely unchanged from the previous period at 10.1%.

Operating cash flows were negative to the value of R562.7-million on the high inventory levels awaiting the commissioning of the second furnace.

Milled tonnages from the combined operations increased by 3.7% to 2.3-million tonnes. Both Zondereinde and Booysendal contributed to the increase and the 4.7% improvement in PGM production to 246 000 oz.

Purchased metal also picked up year-on-year to 30 000 oz with two additional unnamed long-term customers secured.

The production of chrome concentrate increased by 10% to 311 000 t in line with the higher upper group two tonnages milled at both operations. This is an important revenue stream for Northam.

Edited by Creamer Media Reporter




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