Platinum producer Royal Bafokeng Platinum (RBPlat) last week posted a marginal rise in third-quarter production as it scales back its activities to ride out the current depressed conditions in the platinum-group metals (PGMs) market.

The JSE-listed group, which had implemented its cash preservation strategy during the quarter under review, delivered a 3% increase in platinum, palladium, rho- dium and gold (4E) metals- in-concentrate output to 82 900 oz.

Platinum and palladium production increased 2% and 3% to 53 400 oz and 22 000 oz respectively.

The rise in output was a result of a 6% increase in tonnes milled to 725 000 t, combined with a 3% reduction in built-up head grade to 4.15 g/t during the three months under review.

RBPlat posted a 9.2% year-on-year rise in cash operating costs for the quarter to R703-million, while unit costs increased by 4.4% year-on-year to R987/t milled and by 7.7% year-on-year to R13 310/oz.

The group’s capital expenditure (capex) increased 22% to R84.5-million during the third quarter, while its stay-in-business capex declined 48% to R21.3-million in line with the miner’s cash preservation strategy.

However, RBPlat posted a 36% surge in expansion capital to R101.4-million during the period under review, owing to progress made at the Styldrift project during July, before the company’s scale-down strategy was implemented in August.

The group embarked on a plan to reduce noncritical expenditure and improve short-term cash flow, which saw RBPlat scale back construction and related capex activities on the Styldrift I project.

The group had also deferred the development on the upper group 2 (UG2) at South shaft to 2017 and transferred the UG2 trial mining teams at the South shaft to the higher-grade Merensky reef panels.

The Phase III construction capex planned for 2016 was also deferred until 2017, as the project was well ahead of schedule at 86% completion against a plan of 77%.

Investec analysts noted that, while RBPlat had one of the more attractive mines in South Africa, the challenging pricing environment and cost pressures were forcing most PGM miners to cut costs and defer development investment.