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In the 12 months to June 30, diversified mining company African Rainbow Minerals (ARM) achieved the 4% carbon reduction target that executive chairperson Dr Patrice Motsepe set for the Johannesburg Stock Exchange-listed company.

"But that's just the tip of the iceberg," said former ARM CEO Mike Schmidt, in his new green role as executive of growth and strategic development in the executive chairperson's office.

While ARM has set targets to achieve net-zero scope 1 and 2 greenhouse gas emissions from mining by 2050, Schmidt highlighted in response to Mining Weekly questions about the company's decarbonisation progress that "we review those targets every single year".

In developing decarbonisation pathways that detail the short- and medium-term steps needed to achieve the long-term target, ARM is focusing on ways to implement these through the allocation of capital to renewable energy and other measures, developing executive incentives to drive operational action, and introducing data systems that improve the quality and efficiency of its reporting.

Having just come off intense operational and training involvement, Schmidt added: "We're getting an understanding of what we can do."

While ARM expressed happiness about the R1.5-billion worth of headline earnings brought in by coal in the 12 months to June 30 - which was a 65% improvement on the headline earnings that the combustible black rock generated in the 2022 financial year - Motsepe simultaneously expressed deep commitment to working together to deal with the challenge of climate change, along with equal support for the success of South Africa's just energy transition.

Through its membership of the International Council on Mining and Metals, ARM went public as early as 2017 on management incentivisation to meet the net-zero imperative, while obviously doing all the right things from energy efficiency and responsible citizenship points of view.

"You would have seen that in the last six months, we announced the 100 MW intervention on solar power, which will go a long way to help the platinum operations, not only by reducing their electricity consumption, but also the power disruption that has hit them very hard over the last couple of months," said Schmidt.

In April, a 20-year power purchase agreement was concluded with SOLA Group and financial close was reached for wheeling 100 MW of solar photovoltaic (PV) power to ARM Platinum's mining operations. This agreement is expected to generate 4 900 000 MWh of renewable electricity and eliminate 4 800 000 t of carbon dioxide emission over 20 years.

Construction of the solar PV facility began in July and electrical energy from it is expected to begin supplying ARM Platinum's mining operations in 2026.

Eskom is currently building a new 132 kV transmission line to meet increased electricity requirements associated with the Two Rivers Merensky Project.

Construction completion and commissioning are planned for financial year 2024 in time for the new Merensky concentrator plant's power requirements. This investment in network infrastructure will further contribute to the potential for wheeling renewable power to the mine.

At ARM Ferrous mining operations, a feasibility study commissioned in 2021 experienced performance challenges and the contract has been terminated. The Northern Cape mines are now progressing with a prefeasibility study to explore the correct energy mix for the mines that will cater to the baseload demand.

The study will also explore the best option between outright ownership versus sourcing power from independent power producers.

"We know that diesel costs, excluding the capital component, run at eight times the cost of electricity, which is itself quite prohibitive," said Schmidt, who is intent on not only making a big dent in the company's carbon emissions but also driving it down the cost curve.

"All the mines have got a commitment t...

This week, Mining Weekly Editor Martin Creamer discusses the World Platinum Investment Council's forecast of the biggest platinum deficit on record and significantly low above-ground stocks; African Rainbow Minerals executive chairperson Dr Patrice Motsepe stressing that the partnership between the mining industry and Transnet needs to produce results; and African Rainbow Minerals group taking steps to generate its own clean electricity.

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Government has been making progress in achieving the targets set out in the Hydrogen Society Roadmap for South Africa; however, there are still areas that require more focus, especially in terms of capitalising on the opportunities that the green hydrogen economy presents for the county's endowment of platinum group metals (PGMs), as well as the role it can play in the country's just energy transition.

This was noted by speakers during the Mapungubwe Institute for Strategic Reflection's (Mistra)'s eighth yearly PGM roundtable, held on September 6.

Department of Science and Innovation Hydrogen and Energy director Dr Cosmas Chiteme said that, with the roadmap, the country is aiming to use its mineral endowment, renewable energy assets, land availability and local industry capabilities to create a globally competitive hydrogen economy as part of its Economic Reconstruction and Recovery Plan.

He pointed out that, in line with the Just-Energy Transition-Investment Plan, the country could potentially be rebranded as a destination for sustainable investment that incorporates environmental, social and good governance principles.

Chiteme highlighted that the approval by National Cabinet to extend the Hydrogen South Africa RDI Programme is an indication the country remains committed to contributing to the growth of the global hydrogen economy.

He added that government has initiated engagements with the private sector and international partners to design appropriate operational models for the effective implementation of the roadmap.

Mistra executive director Joel Netshitenzhe highlighted two major milestones since last year's roundtable as, firstly, the R105-billion energy investment commitment of Hive Hydrogen, the biggest investment pledge announced at the fifth South African Investment Conference in April.

Hive Hydrogen's commitment entails the construction of a green hydrogen/green ammonia production facility at the Coega Special Economic Zone, in the Eastern Cape, as well as the construction of a seawater desalination plant capable of meeting about half of the water needs of the Nelson Mandela Bay metropolitan area, which is water-short.

Secondly, he mentioned that energy company Sasol in June produced the first green hydrogen from its Sasolburg electrolyser.

Netshitenzhe said these were two instances of practical progress since the steady emergence of the country's hydrogen economy.

He pointed out, however, that despite the progress made, the country must bolster its efforts to be on par with other countries that are also undertaking similar endeavours.

He added that, with the total cost of ownership of fuel cell light vehicles to be cheaper than battery electric vehicles and internal combustion engine vehicles by 2026, combined with the Inflation Reduction Act in the US and similar measures in Europe, there is an argument to be made that the challenge of producing green hydrogen economically is now over, and what is required is the necessary infrastructure and full-scale operationalisation.

Netshitenzhe emphasised that PGMs would be central to these efforts.

Anglo American sustainability head Stephen Bullock emphasised that, to ensure the country continues to benefit from its considerable PGM endowment, it must invest significantly into the development of new demand segments for this, including the hydrogen economy.

He pointed out that this would also require investment into renewable energy to support the green hydrogen industry, with the mining industry uniquely positioned to support this owing to its land access, project execution skills and solid balance sheets.

Netshitenzhe noted that issues still to be tackled include the risk aversion of financial institutions, owing to uncertainty around pricing and offtake demand, and how the county can ensure an enhanced partnership with development finance institutions.

He also mentioned the need for reg...

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The biggest takeaway from today's Platinum Quarterly report and updated full-year forecast of the World Platinum Investment Council (WPIC) is the predicted record platinum deficit of more than a million ounces as well as the nigh wipe out of above-ground platinum stocks.

Speaking to Mining Weekly on the WPIC's latest Platinum Quarterly and updated full-year forecast, WPIC research director Edward Sterck pointed out that forecast is the biggest platinum deficit on record in both ounce terms and as a percentage of demand. (Also watch attached Creamer Media video.)

By the end of this year, it is estimated that above-ground platinum stocks will be down to about six weeks of supply, which the market is expected to begin reflecting.

With total supply flat, total demand will lift 27%, with automotive recovery up 13%, or 381 000 oz, driven by greater-than-expected vehicle production, increased substitution and higher loadings.

Industrial demand is heading for a record 2 667 000 oz through capacity expansions, and total 2023 investment demand is forecast to be 386 000 oz.

The core drivers of platinum's expected 27% demand growth in 2023 were clear to see in the second quarter of this year, and built upon foundations laid in the previous two quarters.

The research shows that automotive and industrial demand growth underpin total demand growth in 2024 and beyond, which offers both short- and long-term value incentives for investors, as well as protection from downside risks presented by inflationary headwinds and high interest rates.

Continuing electricity shortages in South Africa are exacerbating the deficit and maintaining the downside risk to mined supply.

Meanwhile, the link between platinum and the green hydrogen economy is increasingly better known owing to green hydrogen produced by platinum-containing electrolysers having a significant role to play in the energy transition.

Mine supply is expected to be broadly flat year-on-year and so is recycling supply, also broadly flat year-on-year.

Demand is being driven by a 13% increase in automotive demand year-on-year in combination with a 14% increase in industrial demand, and then a strong year-on-year improvement in investment demand.

"Over the course of probably 2021 and 2022, we saw quite strong disinvestment from platinum. This year, we're expecting that to move back into pretty reasonable positive territory. All of those factors in aggregate, ultimately result in that strong 27% year-on-year growth in demand," Sterck tells Mining Weekly.

How significant is automotive and industrial demand growth?

Both are expected to grow quite significantly. Automotive demand is being driven by ongoing substitution of platinum and palladium. It's also being supported by an increase in vehicle production numbers this year. Over the last couple of years, we saw vehicle production or vehicle outputs, being artificially suppressed by the semiconductor shortage, so effectively, the automakers simply couldn't secure enough semiconductors to manufacture cars. This year we're seeing that situation significantly ease and then you've also got a tightening of emissions legislation which is resulting in sort of more PGMs being used in the exhaust treatment systems for heavy-duty vehicles and for non-road vehicles in particular. That's a big factor for the automotive side. On the industrial side, we've got big capacity additions in the chemicals industry. Those came through in the second quarter of this year, but also in the second half of the year, quite a number of new glass manufacturing facilities are expected to come online, and those two factors are really what's driving industrial demand growth. I guess we're only talking about 2023, but as the standard at the moment, it's difficult to see any real changes to those demand drivers going forward, so we would sort of be expecting to see continued strength in demand in su...

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Ensuring cost-competitive operational performance and increasing efficiencies and outputs to improve margins were cited as being key by new African Rainbow Minerals (ARM) CEO Phillip Tobias when he outlined the operating, low price, logistics, power, water and above-inflation cost challenges of ARM's 2023 financial year to June 30.

"A cost focus is very key," Tobias emphasised when the Johannesburg Stock Exchange-listed company reported 21% lower headline earnings to R8 981-million on September 4.

"Very important is to continue engagement with Transnet to implement sustainable logistics solutions that are value accretive to all stakeholders," he said.

The South African diversified company, headed by Dr Patrice Motsepe, which mines iron-ore, manganese ore, chrome ore, platinum group metals (PGMs) and coal, also has a strategic investment in gold through Harmony Gold. ARM's ferrous metals interests are held through wholly owned ARM Ferrous which owns 50% of Assmang.

Implementation of technology to enhance productivity and efficiencies, looking for appropriate new technology and employing it to deliver better volumes, were highlighted, along with delivering existing growth projects on time and on budget. Applying what went well with the successful R7.4-billion Black Rock project as well as the associated skillsets to projects under way, such as the Two Rivers Merensky project and front-end loading for the Bokoni platinum group metals (PGMs) project, is key. ARM is intent on transitioning Bokoni into execution mode and delivering it on time and on budget.

As an immediate area of attention, improvements are being driven by enhanced levels of mechanisation and automation, and appropriate new technology and fit-for-purpose information technology systems.

"Very important is to control things that are within our control, especially in the PGMs space, and ensuring that we improve our grades close to reserve grade and reduce waste and dilution. It's an area that's getting our urgent attention," said Tobias during the presentation covered by Mining Weekly.

"A lot can be mentioned about where we are positioned following the drop in iron-ore and manganese prices, together with reduced sales volume, especially in the ferrous space.

"If you look at iron-ore, the installed capacity is around 16-million tons and we only delivered 13.2-million tons.

"On the manganese side, Black Rock and Gloria mines have been capacitated to deliver between 4.3-million tons and 4.6-million tons. But the operations have been constrained in this last year by the logistics challenges that we've faced, on rail and at port levels.

"Management is continuing to work closely with Transnet to improve the situation and we do believe that we will certainly be able to land at some of the long-term sustainable solutions.

"In terms of the manganese alloys, we've experienced the high records that have been delivered by Sakura Ferroalloys.

"On the PGMs side, though there were increased tonnages from Two Rivers and Modikwa, what really challenged us was grade and to that extent, we're looking at making sure that we optimise mining and reduce waste dilution.

"We have strong Ebitda margins in iron-ore, coal and PGMs, even through there has been a regression in PGMs from a 55% Ebitda margin to 42%. Those three commodities are still delivering on over 40%. However, manganese ore and manganese alloys have been challenged, with manganese ore consistent year-on-year.

"Khumani remains a tier-one iron-ore asset with more than 20 years of life. It has high-grade and low-strip ratios.

"But for the first time, this year we sold less than 12-million tons, a number never seen in the past ten years.

"That really tells you the extent of the challenge that we are facing emanating from the Transnet employee strike that lasted close to ten days, and after those derailments and unavailability of locomotives. Through ...

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The partnership of South Africa's mining industry and State-owned rail enterprise Transnet must translate into "results, results, results", African Rainbow Minerals executive chairperson Dr Patrice Motsepe emphasised at the diversified mining company's presentation of 2023 financial results.

On the operational front, iron-ore, manganese ore and thermal coal volumes were negatively impacted by logistics challenges in the 12 months to June 30, Johannesburg Stock Exchange-listed ARM reported on September 4.

"For us in the private sector, the principle of employing the best skills and expertise, the best people for the job, is non-negotiable, absolutely non-negotiable," Motsepe said, in drawing attention to the private sector employing young black, coloured, Indian and white South Africans to occupy senior positions, "not because they are black or coloured or Indian or white, but because they are the best for the job".

"We can't be experimenting. There's no time to be playing around and fidgeting and saying your experience is questionable, but you're smart and bright, and then you put a smart and bright person in a leadership position which requires five, seven and sometime ten years of practical experience that the smart and bright person does not have. The best people in any industry are the ones who have grown up in the business and understand the business," said Motsepe.

"Whether you're at Transnet or Eskom or African Rainbow Minerals, it's not the good ideas or even the good plans or the wonderful restructuring, or the new management that you put in place. That's important but what's more important are results, results, results.. The partnership with the mining industry and Transnet must translate into results.

"We need to work together, that's why we have to continue to build the trust . . . we should never really be having problems as a country in having enough trains timeously.

"You'll see that part of our volumes are down because the partnership with Transnet, which is something that's important to us, can do much better, not just for African Rainbow Minerals, but for all of the mining companies that use Transnet," added Motsepe.

In response to Umthombo Wealth analyst Sandile Magagula on what was informing ARM's higher 2024 iron-ore export volume guidance from 12-million tonnes to 13.2-million tonnes, ARM Ferrous CE Andre Joubert pointed out the issues that influenced the higher guidance as being a combination of Transnet having a worker strike the previous year, followed by a very slow ramp-up back to production, which was included in the poor performance of Transnet, along with the moving of the Transnet allocation from the Beeshoek iron-ore mine to the Khumani iron-ore mine. There was a 350 000 t/y rail allocation to Beeshoek but with wagon capacities of only 65 t.

"Now, we've diverted those trains to Khumani mine at 100 t per wagon, so just that gives us almost 200 000 t a year extra. Then also, with deep engagement and involvement with Transnet and the iron-ore producers, we participated in the planning for the shutdown and in the tamping process to restore and level the track.

"We assisted Transnet in getting that tamping machine in place. Now, in October, we're going to go for a ten-day shutdown and during that shutdown, there's going to be a lot of work done and we're assisting and working with Transnet in terms of that planning.

"The outcome of that is an objective that we have, which is to fix the areas where there's speed restrictions due to the condition of the rail and the sleeper network and lift the majority of those speed restrictions, which will improve the overall cycle time."

The plan that Transnet has is to increase the current 35 iron-ore train slots per week to 38 train slots per week. This is based on real planning and these are the elements that are going to give us that improved performance from our partners in Tra...

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Ground works and civil works are reportedly progressing well for the installation of a dense medium separation (DMS) magnetite plant in South Africa's Bushveld Complex.

The plant is expected to be installed in around four weeks, with first sales set to follow four to six weeks thereafter.

The DMS magnetite project is described by Ironveld CEO Martin Eales as being beneficial for its Ironveld Mining subsidiary in terms of reducing overall average mining costs and, in time, likely contributing positive cashflow, without the London Aim-quoted company having to divert funding from its core smelting activities.

Ironveld, which holds mining rights over 28 km of outcropping Bushveld magnetite with a compliant ore resource of 56-million tons of ore, last year agreed to acquire and refurbish a Rustenburg smelter to process its magnetite ore into high-purity iron, titanium slag and vanadium slag.

"Sable is really pleased to be partnering with IPace in this exciting project that we believe will generate good cashflow for all the parties and provide a base for further developments," Sable Exploration and Mining CEO James Allan stated in a Stock Exchange News Service announcement.

Ironveld Mining and joint venture (JV) partner Pace agreed funding and operational structure amendments to the DMS magnetite operation with a subsidiary of JSE-listed Sable Exploration and Mining.

The new structure retains Ironveld's ability to supply ore into the JV and benefit from a share of positive cashflows without having to fund the initial capital expenditure.

The JV is responsible for erecting, operating and maintaining the plant alongside marketing of the final product, while Ironveld Mining will continue to supply ore on a cost-plus basis to IPace.

Sable Exploration and Mining, through subsidiary Sable Platinum Holdings, will advance R15-million for the establishment of an initial quick start of the plant, which will have a capacity of 10 000 t a month. There will also be an option to fund future expansions in capacity, depending on the success of the venture.

Sable Platinum Holdings and IPace have agreed that investment in a larger plant will be considered once the proposed plant has reached full capacity.

Mining Weekly Editor Martin Creamer unpacks this week's biggest news. Northam paid R2.4-billion in dividends and highlighted its business risks ahead; Vedanta Zinc is looking to invest $500-million as soon as rail and energy issues are overcome; and there are plans for lower carbon electricity supply for Hillside Aluminium.

Although JSE-listed Impala Platinum battled to take over its now acquired subsidiary Royal Bafokeng Platinum (RBPlat), much work is now needed to optimise the operations and get costs down, following double-digit cost increases for the business over the last year.

CEO Nico Muller explained during a media briefing on August 31 that RBPlat would require "dedicated attention" to extract the quality resource that it offers.

RBPlat is a mid-sized platinum group metals (PGMs) producer with mining and concentrating operations contiguous to the Impala Rustenburg portfolio on the western limb of the Bushveld Igneous Complex in South Africa.

The business is premised on shallow, low-cost and mechanised operations; however, what has transpired are constraints in processing throughput and recovery, notably at the Styldrift smelter.

The Styldrift site is one of the last known high-grade blocks of shallow Merensky reef deposits. The current Merensky and upper group two resources support a life-of-mine in excess of 40 years.

Implats' near-term focus at RBPlat is to optimise costs, improve metallurgical performance, complete a ramp-up at Styldrift, and plan and implement medium- and longer-term initiatives to realise the synergies provided by the acquisition.

In the second half of 2015, RBPlat made the strategic decision to defer ramp-up at Styldrift, owing to low PGM prices at the time. However, towards the latter half of 2016, the progress made at Styldrift, as well as basket price increases, allowed RBPlat to commit to the next phase of expansion, which ramped up the mine to 150 000 t a month. This milestone was achieved in October 2018.

At steady-state Styldrift can produce 320 000 oz/y of platinum, palladium, rhodium and gold (4E).

Factors affecting Styldrift's performance over the last year include a lengthy Section 54 stoppage following a fatality, as well as poor productivity.

RBPlat's cash cost per 4E ounce increased by 22% in 2022, resulting from inflation and lower production volumes at Styldrift.

Muller explains that the delay in finalising the RBPlat transaction, since Implats first offered to buy out all shares it did not own at the end of 2021, contributed to uncertainty and lower productivity.

Implats launched the acquisition of RBPlat in November 2021, with an offer of R90 in cash and 0.3 Implats shares per RBPlat share. Rival Northam Platinum also tried to take over RBPlat with an offer of R172 apiece, but subsequently pulled the offer and sold its shares in RBPlat citing PGM price considerations.

"There are fundamental technical weaknesses at the moment at both the processing plant, and particularly the new plant, Maseve, which never got going," Muller notes.

The Maseve concentrator plant is northwest of the Bafokeng Rasimone Platinum Mine's South shaft and to the south of Styldrift. The concentrator was upgraded to a capacity of 180 000 t a month in 2022, to process ores from the South shaft and Styldrift.

Muller adds that Implats will need to technically reorganise the way in which RBPlat is managed, especially with regard to preventive maintenance, spares sourcing and inventory management.

The fact that RBPlat is now incorporated into a larger company, which has a vast concentrator capacity and typical recoveries of 89%, bodes well for RBPlat's future. RBPlat's operations currently have a recovery rate of 80%.

"I have no doubt the technical expertise of Implats will be able to restore recovery at RBPlat," Muller states, adding that an optimised RBPlat and its assets will provide flexibility for the group, as well as an opportunity to drive down costs at group level.

Muller anticipates an optimisation of RBPlat's operations will take between 12 and 24 months.

Commenting on plans for a Styldrift II operation, Muller says the size, grade and shallow depth of the mineral resource characteristics of Styldrift II represent a significant investment opportunity of R20-billion, which Implats will only pursue later on.

The curre...

Impala Platinum (Implats) CEO Nico Muller says platinum group metal (PGM) market fundamentals are stronger than what current pricing suggests.

He also does not expect there to be further significant price declines.

Reflecting on the company's results for the financial year ended June 30, Muller says the company had anticipated a fall in PGM prices - "admittedly it happened much faster than originally expected".

He adds that the current prices are "not bad" compared with the last 15 years, particularly as 2021 and 2022 had record price spikes.

Implats declared a 63% lower dividend at R5.85 for the financial year, on the back of lower PGM prices.

This compares with the dividend of R15.75 it paid out in the prior financial year, when it reported a stellar R53-billion in earnings before interest, taxes, depreciation and amortisation (Ebitda).

The group posted a 32% year-on-year decline in Ebitda to R36-billion for the financial year under review.

Implats' profit for the year amounted to R6.1-billion, marking an 81% decrease on the prior year's profit of R33.1-billion.

Headline earnings per share (HEPS) came to R22.11 in the reporting period, which marks a 42% decline on the HEPS of R38.53 for the 2022 financial year.

Gross refined production of 2.9-million ounces compares with the 3.08-million ounces produced in the prior year.

Tonnes milled from the group's managed operations increased by 7% year-on-year to 23.8-million tonnes, with higher reported volumes at Impala Rustenburg, Zimplats and Impala Canada, together with a consolidated contribution of 403 000 t from its newly acquired Royal Bafokeng Platinum (RBPlat) subsidiary, which all offset lower throughput at Marula.

Platinum, palladium, rhodium, iridium, ruthenium and osmium (6E) production at managed operations increased by 6% to 2.42-million ounces, and a maiden contribution of 43 000 oz in concentrate from RBPlat was recorded for the month of June. 6E concentrate production of 541 000 oz from joint venture operations was 1% lower year-on-year.

Implats realised an average platinum price of $962/oz in the year under review, an average palladium price of $1 763/oz and an average rhodium price of $11 696/oz, compared with prices of $1 008/oz, $2 211/oz and $16 544/oz for the three metals, respectively, in the prior year.

The group's production was somewhat constrained owing to smelting capacity being unavailable during the scheduled rebuild of the Number 4 furnace in Rustenburg. The company also experienced load curtailment in the period, ending the year with about 245 000 oz of excess inventory.

Muller says the financial year was challenging amid widespread power shortages, softening prices, rand depreciation and persistent inflation.

Notable rand depreciation compounded the impact of high consumable and utilities inflation on the translated cost and capital expenditure (capex) at the group's Zimbabwean and Canadian operations.

Total cash operating costs increased by 19% year-on-year, while unit costs benefitted from higher throughput at managed operations and, despite lower refined output, increased by 14% to R19 834/6E oz, compared with a unit cost of R17 364/6E oz in the prior year.

Capex at managed operations rose by 27% to R11.5-billion, compared with capex of R9.1-billion in the prior year, as spending on replacement and growth projects accelerated and the rand weakened against the dollar.

Implats' stay-in-business spend of R7.3-billion, replacement capital of R2.3-billion and expansion capital of R1.9-billion increased by 16%, 61% and 41%, respectively, in the year under review, compared with the prior year.

The group's financial performance was ultimately negatively impacted on by the retracement in rand PGMs pricing, lower refined production and sales, continued high levels of inflation and the accounting impact of end-of-period inventory valuations and impairments related to Impala Canada and RBPlat, as required by its consolidation.

Implats accounted for three ...