JSE-listed precious metals miner Sibanye-Stillwater has reached agreements, in principle, with fellow listed Anglo American Platinum (Amplats) for the treatment of material following Amplats’ force majeure declaration earlier this month.

Amplats temporarily shut its subsidiary Rustenburg Platinum Mines’ converter plant as critical repairs have to be made to a second converter plant that had water ingress, while the primary converter plant was damaged in an explosion in February.

The repairs to the second plant were expected to take about 80 days, while the repairs to the first plant would be completed only in the second quarter of 2021.

The plant treats melted matte in preparation for refining.

Sibanye has subsequently assessed how best it could use spare platinum group metal (PGM) processing capacity at its Marikana processing facilities, that are based in Brakpan, Gauteng, as well as at the Marikana mine itself, in Rustenburg.

The miner on Tuesday said that PGM concentrate from its Rustenburg operations would continue to be smelted by Amplats on the same terms as an existing toll arrangement for the smelter portion, but thereafter, the resultant matte would be further processed and refined at the Marikana processing facilities.

Sibanye’s concentrate produced from the Platinum Mile tailings retreatment project would be sold to and processed by the Marikana processing facilities for the duration of the force majeure period under the same terms as the pre-existing purchase of concentrate agreement with Amplats.

All benefits of the purchase agreement would accrue to Marikana.

Further, Sibanye’s Kroondal operations operate under a pool and share agreement with Amplats, with 50% of the profits attributable to Sibanye shareholders and 50% to Amplats shareholders.

For the duration of the force majeure period, 50% of the concentrate produced from the Kroondal pool and share agreement – attributable to both parties – would be sold to and processed by the Marikana processing facilities under the same terms as the pre-existing purchase of concentrate agreement with Amplats.

All benefits of the purchase of concentrate agreement for the 50% concentrate treated by the Marikana processing facilities would accrue to Marikana.

The remaining 50% of the concentrate produced by the Kroondal pool and share agreement would continue to be sold to Amplats on materially the same terms and conditions as the pre-existing purchase of concentrate agreement, with delays in payment already agreed to by the two companies.

“We welcome the finalisation of these arrangements with Amplats, since it will largely offset the impact of the force majeure event on Sibanye’s operations and result in a minimal impact on the production outlook for our South Africa’s PGM operations.

“It is also pleasing to note the way our management team has optimised available capacity at the Marikana processing facilities, allowing us to minimise the potential impact on our contractual obligations to our customers and reducing the supply disruption caused by the unanticipated force majeure event,” stated Sibanye CEO Neal Froneman.