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Union Mine exceeds expectations

5th February 2021

     

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Platinum group metals (PGMs) mine Siyanda Bakgatla Platinum Mine (SBPM) is exceeding all financial and operational expectations, says SBPM CFO Imraan Osman.

“Since acquiring Union mine from platinum producer Anglo American Platinum in early 2018, our financial performance has improved significantly. We have stabilised the operations, and have done so with zero fatalities. During the 2020 financial year we achieved three-million fatality-free shifts coupled with a 7% improvement in the lost-time-injury frequency rate,” says Osman.

T

he company has signed a three-year comprehensive wage agreement with Association of Mineworkers and Construction Union until 2022, which has ensured a stable labour environment for the workforce of roughly 7000, including contractors.

He says that the mine’s “excellent” operating performance is based on the higher quality and quantity of ore from underground operations, the optimised metallurgical circuit which has improved PGM recoveries and the enhanced supply chain management system, which has reduced costs and improved working capital management.

“Entering the PGMs industry at the opportune time has further enabled us to leverage off the buoyant commodity prices currently being experienced in the sector.”

SBPM has spent in excess of R430-million in development expenditure. This enabled the mine to improve overall, while extracting higher quality tons from its underground operations. The higher production, coupled with recovery improvements on the metallurgical circuit, resulted in a 20% increase in production, compared with the 2017 performance under the previous management, achieving 308 536 platinum, palladium, rhodium and gold (4E) ounces.

Through the various initiatives coupled with a favourable PGMs pricing environment, the business successfully generated positive revenues of R7.2-billion and earnings before interest, taxes, depreciation, and amortisation of R3.3-billion in the 2020 financial year.

This resulted in a R705-million profit after tax and a R200-million dividend payment to shareholders, which include local communities (27%) and employees (7.3%) through an employee share scheme.

The mine remains focused on socioeconomic upliftment, investing about R16.2-million in socioeconomic projects. The investment is 4% more than the previous financial year.

Despite a strained operating environment, SBPM is expecting to achieve some 270 325 4E ounces resulting in revenue of about R8.7-billion for the year ending February 28, 2021.

Edited by Nadine James
Features Deputy Editor

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