Another platinum mine closes, more platinum project rein-in, but platinum juniors march on
Midcap platinum miner Aquarius Platinum has placed another operation on care and maintenance. This time it is Everest mine, in Mpumalanga, which follows Marikana, in the North West. Read on page 23 of this edition of Mining Weekly of the Johannesburg- and London-listed company now having three of its seven operations out of action, given the 2011 mothballing of the Blue Ridge mine, in Mpumalanga. London analyst Liberum Capital reports that Everest has been suffering a loss of R3 500/oz. Aquarius’s remaining two mines – the flagship Kroondal operation, near Rustenburg, and the Mimosa joint venture mine, in Zimbabwe – plus its two tailings operations are expected to yield cash flows, but Liberum puts a question mark over Aquarius’s acquisition under the current terms of Northam Platinum’s Booysendal South assets and rules out finance for the Booysendal North project completely. Although Aquarius is grabbing all the closure headlines, Liberum says its early action is putting it ahead of its peers from an investor’s point of view.
The black-controlled and black-managed Royal Bafokeng Platinum (RBPlat) has also come up with its own bad news of capital cutbacks and project hold-ups. The JSE-listed company has decided to defer R462-million in project capital expenditure. The first phase of RBPlat’s business review will see the company hold back on planned exploration drilling activities at the Bafokeng Rasimone platinum mine’s (BRPM’s) North shaft and the Styldrift II project, delaying the completion date of August 2017. Also delayed is investment in a mine-personnel chairlift at BRPM’s South shaft, but installation of the chairlift at the mine’s North shaft will continue as planned. Capital to upgrade the BRPM concentrator from 200 000 t/m to 230 000 t/m is being postponed, which means it will no longer come on stream by the end of 2013. RBPlat is taking these austerity measures in the belief that depressed platinum prices are likely to continue into 2013. Labour union Solidarity forecasts more platinum mine closures.
At least two junior miners are more sanguine, however, and are looking longer into the future when their projects are due to yield and seeing a prettier market picture. Read on page 23 of this edition of Mining Weekly of the TSX-listed platinum junior, Platinum Group Metals (PTM), pressing ahead with its plans to finance and complete its 74%-owned Western Bushveld Joint Venture (WBJV) Project 1 platinum mine. Platinum’s bleak short-term outlook has also not stopped start-up company Nkwe from informing the ASX that its Garatau platinum mine, on the eastern limb of the Bushveld Complex, will be in production in 2015, reaching steady-state output by 2017. Moreover, PTM is also looking at exploring and expanding its new Waterberg discovery in South Africa. “It’s not doom and gloom from where we sit. It’s back to basics – grade, thickness, shallowness,” says PTM CEO Mike Jones, who adds that PTM sees great potential for the platinum sector, with automotive sales expanding, and that the Asian growth story is “more important than Europe’s muddle”. He reports solid confidence in the platinum market in the medium and long term and confidence of PTM’s position in that market as it drives towards first production in mid-2014. The Chinese-controlled Wesizwe Platinum is PTM’s partner at the WBJV and the government of Japan is a shareholder in the Waterberg project.