JOHANNESBURG (miningweekly.com) – JSE-listed platinum-mining company Northam Platinum has brought in Australian expertise to upskill local operators at its fully mechanised Booysendal platinum mine in Limpopo.

At the presentation of strike-hit Northam’s first operating loss since 1998 after its Zondereinde mine was impacted by an 11-week strike, retiring CEO Glyn Lewis said matric-level Limpopo recruits were being upskilled by Australian expertise well versed in mechanised mining (also see attached video).

Northam slumped to a total comprehensive loss of R92.7-million for the six months to December 31, largely because of the prolonged strike at its labour-intensive Zondereinde mine, which cost the company R750-million in unearned revenue.

Earlier this week, gold mining company Gold Fields announced that it had brought in 15 Australians, also mechanised mining pundits, to pep up the lagging South Deep gold mine, which is also now fully mechanised.

On industrial action, Lewis called for the validity of strike certificates to be limited to one week and for an independent strike ballot to be introduced that would require the overwhelming majority of members to vote to embark on a strike.

The new Booysendal mine, which did not suffer any industrial action in the period but which did not ramp up as anticipated, is now going to benefit from upskilling.

“To operate a drill proficiently takes between five and seven years and hence our employment of Australian expertise to assist more especially in this training,” Lewis said.

Elaborating to Mining Weekly Online at question time, the outgoing CEO said low-profile mechanised equipment had been deployed at Booysendal.

“It’s not ultra low, thank goodness,” he added.

The complete mining sequence had been mechanised, including roof drilling, cleaning and charging up.

“It’s a mechanised mine, a fully mechanised mine.”

Proficiency in operating a double boom drill rig required intensive training at the rockface and was by no means a straight-forward process.

“We have a training centre where we have simulator, but getting this down to a fine art comes in actually doing the job,” he added.

The duration of the contract with the Australian expertise would depend on the progress made.

The efforts of a single Australian over six months had shown definite face-advance improvement.

No mechanisation was on the cards for Zondereinde, site of the 79-day strike that lost employees R151-million in wages and denied the company access to 48 000 oz of platinum group metals and gold.

“It was a lose-lose situation,” Lewis said of the strike.

Continual union references to “abundant resources” was “absolutely fallacious” and low grades and increasing depths had to be acknowledged.

The cost and time to establish new deep mines was being undermined by the lack of infrastructure in an over-regulated and dysfunctional environment.

As a result, there would be a decrease in mining investment and a lower demand for manufactured products to support the industry , which would result in job losses, declining taxes and falling mineral exports.

The infringement of the right to work appeared to be receiving little or no attention and the country could only hope that common sense would prevail.

In the six months to December 31, Zondereinde’s platinum group metal sales fell 16.4% to 4 620 kg, with a partial 1 138 kg offset from Booysendal.

Because of the weakening currency position, the average rand basket price was higher at R383 258/kg and contributed to a marginal increase of 3.7% in revenue to R2.3-billion.

The cost of sales rose 23 % to R2.4-billion owing to higher operating costs, increases in third-party toll-treated refining costs and Booysendal’s R224-million amortisation and depreciation charge.

The significant increase in refining and related costs is a result of the temporary outsourcing of smelting and refining services to a third party during the smelter rebuild.

Of the R1-billion raised for Booysendal, R600 million was in cash from shareholders and R120-million through a tap issue on the domestic medium term notes programme.

Some R243.6-million was spent to maintain operations, including R54-million for the smelter rebuild.

Forecast capital expenditure for the remainder of the 2014 financial year is R195.5-million.

A further 28 housing units were sold to employees, bringing the total number of housing units sold since inception of the Zondereinde employee housing scheme to 364.

The group is continuing to consult with the Department of Mineral Resources on the restructuring of its black economic empowerment.

Being studied are ways to realise value from Northam’s 50% interest in the Dwaalkop platinum project, 20.3% of Trans Hex diamond company and 51% in the Kokerboom joint venture, a greenfields iron oxide, gold, copper and massive sulphide exploration project.

A further 10% has been acquired of Northam Chrome Producers (NCP) for R10-million, bringing the total holding to 80%.

NCP, which produces chrome from Zondereinde's upper group two tailings, contributed an after tax profit of R24-million in the current period.