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Robust growth is expected to drive total platinum demand to 8 118 000 oz, leading to a substantial market deficit of 1 028 000 oz in 2024, the World Platinum Investment Council (WPIC) says in its revised full-year 2024 forecast published with its Platinum Quarterly for the second quarter of this year.

Total platinum supply is expected to decline by 1% from the already weak levels of 2023, reaching 7 089 000 oz, while recycled supply will likely see a modest year-on-year increase of 2% to 1 581 000 oz. This gain will be offset by a 2% year-on-year decrease in mined supply, which is projected to drop to 5 508 000 oz.

"We've got really robust demand," WPIC research director Edward Sterck commented to Mining Weekly in a Zoom interview. (Also watch attached Creamer Media video.)

While a higher-for-longer internal combustion engine automotive thesis is feeding into investment interest in platinum, that must be contrasted with worsening supply limitations from mine supply and recycling perspectives.

"Fundamentally, that hasn't been reflected in prices yet - but that sort of disconnect can only be sustained for so long," Sterck added.

This year will be the second consecutive year where the platinum market will experience a significant deficit, driven by robust demand and ongoing supply vulnerabilities.

Mining Weekly: For some time now, the platinum mining industry has been reporting good ongoing demand, but at prices too low to ensure good long-term supply. How is it possible that demand is good but prices are bad?

Sterck: It's an excellent question and something we've been doing quite a lot of work on recently. This sits a little bit outside the scope of our regular platinum quarterly, which we're publishing now. Platinum price inputs can be divided into the three main categories of underlying fundamentals, market-related categories, and then sentiment-related categories. Effectively, for platinum, what we've seen is that underlying fundamentals were the main price-setting mechanism up until about 2010, plus or minus a year. Since then, we've seen more market-related and sentiment-related factors being the main price-setting mechanisms. Part of that has been as a result of things that have occurred in terms of platinum demand from a sentiment perspective, such as Dieselgate and then battery electrification of the drive train. Those have factored into market expectation that future demand for platinum, whilst it might be okay right now, it's not going to be sustained. What we're seeing is the opposite. We're seeing a slowdown in battery electrification, higher-for-longer automotive demand, and so, in theory, we should begin to see those underlying fundamentals return to being the most important price-setting mechanism. Now, that's been somewhat masked over the last couple of years by the big increases in the prices of palladium and rhodium. Those have sustained supply, and now that they have come down with a bit of a bump, as of the middle of last year, we think that's another reason to expect the underlying fundamentals to return to being the most important price-setting mechanism for platinum going forward. When does that tipping point come? That's the question that's difficult to answer right now, so these deficits are being satisfied with above-ground stocks, and we expect the depletion of those above-ground stocks to continue to a point where that market tightness comes in, and then that's the point at which those underlying fundamentals become the most important mechanism for establishing platinum value.

INVESTMENT DEMAND

Investment demand for platinum is projected to reach 517 000 oz in 2024, taking in the purchases of bullion bars of 500 g and above in China, made possible by access to more granular market data.

In the three months of April, May and June, these purchases doubled from last year's second-quarter levels, reaching 41 000 oz, and are expected to achieve 40% year-on-year growth for full-year 2024, reaching 188 00...

The boards of gold producers AngloGold Ashanti and Centamin have agreed to a transaction for AngloGold to acquire all shares in Centamin in exchange for 0.06983 of a new AngloGold share and $0.125 in cash for each Centamin share.

The offer implies that Centamin's share capital is valued at about £1.9-billion, or $2.5-billion.

Following the acquisition, Centamin shareholders will hold 16.4% of AngloGold's enlarged issued share capital.

Centamin's flagship asset is the Sukari gold mine, in Egypt, one of the world's largest producing mines. Since production began in 2009, Sukari has produced more than 5.9-million ounces of gold.

"Today's transaction is highly compelling and builds on the strong foundation we have built. It adds to our portfolio the pre-eminent gold producer in Egypt and offers enormous geological potential that we are very well placed to develop," AngloGold chairperson Jochen Tilk said on September 10.

"[This] will add a Tier 1 asset to our portfolio. The transaction is free cash flow accretive in the first full year of production and net asset value accretive from day one. We will build on the good work by the Centamin team to realise the significant upside in Centamin," AngloGold CEO Alberto Calderon added.

"This transaction is an endorsement of Centamin's achievement in re-establishing Sukari . . . and occurs as the Egyptian government has taken important steps to attract foreign investment," Centamin chairperson James Rutherford commented.

Centamin CEO Martin Horgan added that the company's reinvestment phase, alongside consistent operational delivery, underlines the Tier 1 status of Sukari as a safe, low-cost and large-scale gold producer.

AngloGold said it was well-positioned to operate Centamin's portfolio, given its experience in large-scale openpit and underground mines in Africa.

The acquisition would increase AngloGold Ashanti's yearly gold production by about 450 000 oz to more than three-million ounces, while reducing combined total cash costs and all-in sustaining costs (AISC).

Additional upside is expected through the optimisation of the Sukari underground zones and adjacent exploration blocks.

The predominantly equity-based nature of the deal allows AngloGold to maintain balance sheet stability, while still letting the company fund growth.

Centamin shareholders, meanwhile, would benefit from upfront cash returns, as well as exposure to a larger, more diversified group with enhanced trading liquidity.

Centamin's board said it intends to unanimously recommend the transaction to its shareholders, with directors having already provided irrevocable undertakings to vote in favour of the scheme and resolutions.

The transaction is expected to be completed in the coming months.

CENTAMIN OPERATIONAL UPDATE

Meanwhile, in a trading update published on September 10, Centamin noted that the Sukari gold mine had produced 93 278 oz of gold and sold 102 563 oz to date this quarter.

Cash costs were $715/oz produced and AISC $1 290/oz sold.

Capital expenditure for the quarter to date amounted to $36.1-million, which included investments in raising tailings storage facility two, buying openpit fleet equipment and rebuilding other equipment.

Additionally, the company reported adjusted group free cash flow of $75.5-million for the period. Centamin's balance sheet remained robust, with cash and liquid assets of $244-million as of August 31 and total liquidity of $394-million, including the undrawn $150-million sustainability-linked revolving credit facility.

These figures precede the payment of the interim dividend for June 30 amounting to $0.0225 a share, with a total of $26.1-million due on September 27.

Centamin's full third-quarter results would be released in October.

Horgan highlighted that the Sukari mine continued to perform safely, maintaining the positive operational momentum achieved during the second quarter into July and August.

He said strong production and cost discipline had allowed the company to ben...

Development finance institutions (DFIs) are more than just financial supporters of the hydrogen economy, they are important architects of its future, Development Bank of Southern Africa (DBSA) chief economist Zeph Nhleko writes in an Op-Ed released on Monday.

By mobilising capital, influencing policy, and offering technical support, DFIs are driving the growth of hydrogen projects, especially in emerging markets, Nhleko highlights.

Mining Weekly can also add that the relevance of the growing role of platinum group metals (PGMs) in the green hydrogen economy is strengthening significantly worldwide.

"As countries like South Africa work to harness their renewable resources and develop hydrogen technologies, DFIs will remain central to overcoming challenges and advancing towards a sustainable energy future," Nhleko adds in the release.

DBSA recently published a working paper on the hydrogen economy. As the world turns towards greener energy solutions, hydrogen stands out as a transformative force in the quest for sustainability.

DFIs are playing an important role in nurturing this growing sector, particularly in emerging markets and developing economies. Their involvement goes far beyond just providing funds, they are shaping the future of hydrogen by managing risks, influencing policies, and offering crucial technical support, Nhleko outlines.

BRIDGING MONEY GAP

Hydrogen technology holds incredible promise, but it demands substantial investment.

In developing countries, where the annual need for funding can reach around $100-billion, traditional financiers often hesitate owing to the high risks and costs involved, which is where DFIs step in, Nhleko outlines.

Mining Weekly has received a LinkedIn release to the effect that the European Commission has approved State aid of €998-million for green hydrogen production, which is PGM-based.

The Dutch government will provide direct grants of up to 80% of project investment costs.

The grants are open to projects with at least 0.5 MW of electrolyser capacity and will be awarded following a competitive auction set to run this year.

Holland is reportedly targeting reaching 500 MW of electrolyser capacity in 2025 and 3 GW to 4 GW by the decade-end.

The European Union is expected to install at least 6 GW of electrolysers in 2024 and at least 40 GW by 2030.

The Dutch State aid approval comes on the heels of the European Commission approving a €1.2-billion Spanish scheme to support the production of green hydrogen.

DFI AND RISK

"DFIs specialise in funding projects that might seem too risky for conventional investors. They use innovative financial models like blended finance, equity, and loans to bridge the funding gap. For example, a DFI might provide initial funding or guarantees that help attract private investors. This approach not only de-risks these projects but also brings in additional investment, making it feasible to push forward with ambitious hydrogen initiatives," Nhleko points out.

SHAPING SUPPORTIVE POLICIES

The right policies can make or break the growth of the hydrogen economy. Points Nhleko highlights include DFIs being instrumental in crafting enabling policies by collaborating with governments and stakeholders. They help design regulations that make hydrogen investments more attractive and less risky.

DFIs, he adds, advocate for policies that might include tax incentives or subsidies for early adopters of hydrogen technology. They also work to ensure that hydrogen projects align with national energy strategies, creating a stable and encouraging environment for investors. By helping shape these policy frameworks, DFIs play a key role in ensuring that hydrogen projects get the support they need to succeed.

BUILDING TECHNICAL EXPERTISE, INFRASTRUCTURE

Financial backing is only part of the equation. DFIs also provide essential technical support and help build the infrastructure needed for hydrogen production and distribution. This includes facilitating processes like competit...

The global market is going through a very challenging time right now, African Rainbow Minerals (ARM) executive chairperson Dr Patrice Motsepe noted on Friday, when the Johannesburg Stock Exchange-listed company reported a 43% fall in headline earnings to R5.1-billion in the 12 months to June 30.

"You'll see from our results that headline earnings, dividends and various other indicators - in line with mining companies all over the world - have come down," Motsepe outlined, ahead of highlighting the strong performance of Harmony Gold, of which ARM has been an integral part more than two decades.

"I'm very proud of how Harmony has grown," Motsepe enthused, noting that "they wanted to call it Harmony ARM Gold, and I said, no, just call it Harmony", to avoid shareholders queries around its great share price and incorporation advocacy.

But, he indicated, the future might be different: "I think in future there'll be a question mark," in the context of the importance of copper long-term, and both companies entering the copper space, Harmony in Australia and Papua New Guinea, and ARM in Canada.

During question time, he said of the Harmony opportunity: "We've been looking at this question for the last 15 years, with the simple objective of doing what's in the best interest of our shareholders.

"Do we sell it? Do we hold onto it? Our role in Harmony is significantly more than just a passive role, in the sense that Harmony was a merger between our company, ARM Gold, which laid the foundation of African Rainbow Minerals, and Harmony.

"We're a very long-term shareholder and I think there's also some issues about being an anchor shareholder, but we view Harmony in the same way as any other investment.

"We have to do what's in the best interest of our shareholders. If what's in the best interest of our shareholders is to sell Harmony, we'll do that.

"Some of our shareholders, earlier during the year, noted Harmony's high price, and the point raised is absolutely correct."

The far-reaching point was re-raised during question time by HSBC mining equity analyst Leroy Mnguni, who expressed understanding that the Harmony stake gives ARM future copper exposure and that Harmony has done very well for ARM, but posited that the benefit did not carry through to ARM's earnings or its free cash flow.

"Would it not be more beneficial for ARM to monetise the Harmony stake to invest in assets that ARM can control and can directly benefit from in terms of earnings and free cash flow?" Mnguni asked.

In response, Motsepe outlined ARM's active participation beyond Harmony's board meetings and in its executive committee, where it provides fundamental inputs on the gold company's operations and how they are running.

"So, the bottom line for us in Harmony is we're enormously excited about Harmony's. huge investments in copper, Harmony going into copper because of us," said Motsepe, who has been Harmony chairperson since the merger.

"We want to maximize the equity we have in Harmony. One of the things that the management was looking at, and good work has been done, is does part of the strategy in the short-term entail using some of the Harmony equity, which is very high right now, to enable us to get loans from the bank and use that, in essence, as security or to cash.

"We're looking at all of those options. The beauty is were not desperate. We've made mistakes at the past, where it was the right thing at the time to sell.

"I won't mention some of the assets that we sold, which we should never have sold, but at the time, it was absolutely the right thing to do without the benefit of hindsight.

"A few years down the line, my shareholders came and said, we put pressure on you at the time to sell, and indeed it was the right thing, but now, if we had held on, we would have made five, six, seven to ten times the amount that we received at the time of the sale.

"So, you don't fall in love with any asset. You fall in love with the profitability. You fall in love with ...

Johannesburg Stock Exchange-listed Harmony, which has 74 years of mining experience in South Africa and two decades in Papua New Guinea (PNG), is not only a mega gold mining specialist with an emerging copper footprint, but on Thursday also flagged the cost-offsetting value of its silver and uranium production.

While 96% of revenue is from gold, byproducts play a role in cost offsetting, with silver produced at Hidden Valley in Papua New Guinea contributing 3% and uranium mined at Moab Khotsong in South Africa 1%.

Silver production rose by 39% to a record 3.7-million ounces, generating revenue of R1.7-billion and uranium production increased by 13% to 590 000 lb, generating revenue of close to R900-million.

Interestingly, Harmony mineral reserves of 130-million ounces of gold and gold equivalents are being boosted significantly by gold recovery from surface tailings, Harmony CEO Peter Steenkamp outlined during Thursday's presentation of superb operational performance that was lifted sky-high by a very strong gold price tailwind. Steenkamp, who has served the company since 2016, will retire at the end of this year.

Interestingly, surface operation production increased by 21% to around 9 000 kg, representing 11% of group production, with all-in sustaining costs declining to R700 000/kg, illustrating how profitable these operations are at current gold prices. They generated R2.6-billion in operating free cash flow at a 2024 financial year margin of 25%.

"South African surface operations delivered a phenomenal performance," Harmony COO Beyers Nel reiterated at the presentation covered by Mining Weekly.

Once the Legacy streaming contract comes to an end before the end of this calendar year, the gold price received for gold sales at Mine Waste Solutions are poised to increase by 20%, generating more than R900-million in additional cash flow.

Moreover, further feasibility studies are underway to determine whether another mega tailings treatment operation can be created in the Free State, where in old tailing dams host a 5.7-million-ounce resource.

"We believe there's good potential to remine our old tailing dams in South Africa for possibly another 100 years," Nel posited.

Nine underground mines, two opencast mines and tailings dumps make up Harmony's gold-heavy portfolio of diversified operating assets that also promise a 20% copper contribution within the next ten years from the Eva copper project in Australia as well as the long-delayed Wafi-Golpu project in PNG.

Capital expenditure of R10.8-billion, more than Harmony has ever spent in one year, has been allocated for South Africa's Moab Khotsong and Mponeng gold mines as well as Wafi-Golpu and Eva.

In the 12 months to June 30, conscientious mining has enabled above-plan output to make the best of the fortuitously high gold price and soar to record revenue, margin and cash flow heights.

Mineworkers are benefiting from a R1.2-billion employee share ownership scheme and the planet is being spared with 30 MW of green power already being generated and more than 500 MW of more renewables wanted.

The 1.65-million ounces of gold produced once again outstripped guidance as did underground gold grades at 6.11g/t and all-in sustaining costs at R901 000/kg. Operational free cash flowed river-like to more than R13-billion.

The Mponeng extension has already put 2% on to mineral reserves and the lives of Mponeng and Moab Khotsong have been extended by at least 20 years and that of surface operation Mine Waste Solutions by 14 years.

Decline work at Moab Khotsong and development of Mponeng's carbon leader section are under way. Rehabilitation of the Tau Tona shaft pillar, which will be mined from Mponeng, has begun.

These projects have together added 5.2-million ounces to gold reserves and ensure steady-state production at each mine of more than 200 000 oz at a recoverable grade of 9 g/t.

COPPER

With the feasibility study update at Eva copper progressing, the Queensland government has provided...

What Harmony Gold has achieved in the 12 months to June 30 is incredible with the true driver of value has been quality gold ounces and a display of capability regions beyond South Africa, upbeat CEO Peter Steenkamp said on Thursday.

The Johannesburg Stock Exchange-listed Harmony has delivered an exceptional combined performance across its operations at a time of record gold price, which has come together to deliver record cash and dividend for shareholders.

Free cash flow soared 111% to R12 743-million, headline earnings per share soared 132% and earnings per share were 78% up.

"This achievement was a result of clear strategic content and successful execution, enabling us to deliver above plan and capitalise on higher gold prices, which resulted in a record year for Harmony," the long-serving Steenkamp, who retires at year-end, highlighted during a media briefing covered by Mining Weekly.

While the gold price received continues to improve on a sustainable tailwind, the true driver of value has been Harmony's investment in quality ounces.

Underground recovered grades rose 6% to 6.11g/t and total gold production also hit a 6% higher mark at 1 561 815 oz or 48 578 kg.

Production at Mponeng gold mine, the world's deepest, was up 17%, the surface operation of Mine Waste was up 34% Solutions and improved grades lifted Hidden Valley in Papua New Guinea to 17%.

The increase in all-in sustaining costs was held down to1% increase at $1 500/oz (R901 550/kg).

The average gold rice received was 16% higher at $1 999/oz (R1 201 653/kg.)

Group revenue rose 25% increase to R61 379-million and operating free cash flow of R2 188-million was generated by Hidden Valley compared with R615-million in financial year 2023.

"We've got very good momentum at all operations and if one could look at the year just passed, we had very, very good results at most of our operations.

"The big one to stand out is Hidden Valley, and Mponeng's grade was much higher than planned. But that grade is still sustainable and doing well.

"At Doornkop mine, which is very small in our business, we've looked at restructuring the plan to allow us to do all the projects because there is a bottleneck in that area, so we're confident that the plans that we have are unfolding well.

"The teams are doing well, we've got the right leadership in place on all the mines, and obviously all the operations are in good momentum going forward," Steenkamp said in response to Mining Weekly.

Doornkop development is taking place on two levels, which is the new Doornkop going forward.

"To give ourselves a little bit of breather, we choked back the stoping from about 22 000 square meters to 18 000 square meters, 10% to 15%. We just want to make the plan achievable and to get more stoping from Doornkop," Steenkamp added.

COPPER

"As we transform into a global gold copper producer, the foundations are in place which will enable us to continue in this growth trajectory through the extraction of safe, profitable ounces and value accretive acquisitions," added Steenkamp.

Copper represents 21% of Harmony's total declared mineral resources of 136.5-million ounces, while mineral reserves increased by 2% to 40.3-million ounces.

On the back of operational consistency and strong free cash flows, Harmony has declared the final dividend of 94 c a share.

Most project capital continues to be allocated to higher-grade, higher-quality, and lower-risk assets, aligned with improving margins through operational performance and value-accretive acquisitions.

Stronger growth is targeted through investment in higher-grade gold mines, expansion of gold recovery through surface retreatment, and growing international gold and copper assets.

RENEWABLES

The renewable energy programme has been expanded to more than 500 MW to support life of mine extensions

The first phase 30 MW is generating clean energy. The company received a very favourable green loan with which to pursue thae100 MW project.

Life-of-mine extension plans ...

Northam Platinum, which benefits from a full mine-to-market value chain in chrome, sold around 1.3-million tons of chrome for the year, which contributed 12 .5% or R3.8-billion to the revenue of this Johannesburg Stock Exchange company best known for its platinum group metals (PGMs) production.

Chrome production improved by 24% with higher upper group two (UG2) tonnages treated and improving chrome yields at all operations.

Northam has a well-capitalised UG2-dominant resource base, located in prime areas of the Bushveld Complex.

The company's Zondereinde mine, primarily a PGMs mine, is expected to produce 450 000 t of chrome concentrate in financial year 2025, with chrome sales for the group expected to improve to around 1.4 million tons.

Seen as being on its way to becoming a significant chrome producer in the coming years is the developing Eland mine, a shallow hybrid UG2 asset located in the south-eastern portion of the western limb of the Bushveld Complex, 12 km east of Brits, in South Africa's North West province.

"Don't underestimate Eland," Northam CEO Paul Dunne remarked to analysts while displaying a slide showing a strike drive into the UG2 of the Eland mine, which has a 1.6-metre wide orebody that hosts approximately one ounce of PGM per square metre mined and two tons of chrome per square metre mined.

"Based on current pricing, we believe that as soon as Eland reaches an excess of 100 000 oz, it will start be breaking even," Northam CFO Alet Coetzee calculated. Guidance for next year shows it won't be far off 100 000 oz.

Eland's ramp up has begun in earnest and production growth there is leading to margin improvement. The 26 production teams now at its rockface will grow to 64 teams at steady state.

"Eland made its targets this year and as long as it keeps doing that, it'll be a good mine. It has a strong orebody with high chrome, high platinum. We're only one third up the mining ramp up, and we've got most of the fixed cost in place.

"It's unit cost performance will be below that of Zondereinde, mainly because it's only, on average, 200 m below surface, whereas the deepest portions of Zonderenda are ten times that, at 2.3 km. The need for refrigeration, ventilation and so on is not there. We also do not backfill at Eland.

"In its physical characteristics, the orebody itself is very similar to Zondereinda's UG2, and there's absolutely no reason why Eland will, not by volume but by cost, overtake the Zondereinde effort," Dunne commented.

Northam acquired Eland from Glencore for R175-million in 2017.

CHROME LOGISTICS

Logistically, Northam's chrome goes through the Port of Maputo in Mozambique as part of a signed a back-to-back long-term arrangement.

The chrome is shipped to China and then transported inland to Inner Mongolia, where there are large ferrochrome producers with access to low-cost electricity and customers.

Even though the chrome travels a long way to get to its final destination, it remains profitable.

FULL MINE-TO-MARKET OWNERSHIP

Both Dunne and Coetzee emphasised the benefit of having full mine-to-market chrome ownership, which is described as a differentiator for Northern.

The most consequential action that price-hit platinum group metals (PGM) producers can take as an industry is the stimulation of demand.

"But the issue is, are we doing enough to advance the technologies that will benefit our industry, and our views always conclude that we should be doing more," Implats CEO Nico Muller posits.

Currently PGM producers carry out demand stimulation through:

Platinum Guild International (PGI), a marketing organisation created in 1975 with the vision to develop the global platinum jewellery market.

AP Ventures, which advances innovation in hydrogen and decarbonisation.

World Platinum Investment Council (WPIC), which provides insights to advance platinum investment.

International Platinum Group Metals Association (IPA), which focuses on industrial demand issues.

Shanghai Platinum Week, which this year served as a core platform for innovation and collaboration; and

individual companies have combined, for example Sibanye-Stillwater and Implats, to sponsor switching technology between platinum and palladium.

"We also, from time to time, do research-type work in the industrial area, and specifically historically, we've worked very directly with the technical team of Heraeus in Germany to develop new applications," Northam Platinum CEO Paul Dunne outlined during Northam's media roundtable last Friday.

But while battery electrification has received major attention, "hydrogen has been the quiet brother in the corner," Muller observed during last week's Implats' media roundtable.

"Most of us, not all, are members of collaborating entities. As Northam, we are members of the PGI, WPIC, and the IPA, and within those organisations, we contribute financially and with time to promote use of these metals," added Dunne in response to Mining Weekly.

Following the Shanghai Platinum Week, the Guangzhou Futures Exchange announcing details of the first PGM derivatives in China, which are the coiuntry's first platinum and palladium futures contracts.

These physically settled platinum and palladium futures are expected to transform domestic price risk management and lift demand for platinum products.

"The reason we go to Shanghai is because China is the single biggest market and we need to be thoughtful and interactive there. We and Anglo American Platinum were well represented, and so was Tharisa Minerals.

"All three companies spoke during that conference on various aspects of mining and what we're all about and on the sidelines, professional contact was made and fiberglass, fuel cell and electrolyser producers visited.

"I do believe it's an important venue for the world's miners and we'll continue to go, just like we go to the London Platinum Week," said Dunne.

On Northam also be attending and presenting at upcoming New York platinum events in the interests of demand stimulation, he added: "We're going on an investor roadshow during that week to Boston and New York, specifically targeting our US investors post results, and we'll also present at one or two of the platinum conferences that take place in New York."

COPING WITH WEAKER PRICING

The PGM industry is obliged to comply with very strict Competition Commission rules, which means that as producers, they must compete. As single entities within this commodity market, they are not in a position where they can sit around a cigar table and agree in the way that the Organisation of the Petroleum Exporting Countries - OPEC - which is why Mining Weekly put this question to Muller: In what way is Implats strategising to cope with the weaker rand pricing for PGMs?

This was his response: "We always follow a very similar process. The best defensive strategy against weak pricing starts with maximising production throughput because we are a commodity producer, so an increase in volumes reduces one's cost per ounce.

"The second strategy is to reduce costs - and you will see this from our year-on-year unit cost increase of 5% - but in part that is a consequence of incorporating ...

Platinum group metals (PGMs) and chrome producer Northam has entered into a power purchase agreement with an independent power producer for an 80 MW solar farm at its Zondereinde PGM mine on the western limb of the Bushveld Complex.

"This will improve operational resilience and our cost position," Northam CEO Paul Dunne stated during the company's presentation of strong annual production, with the provision of power described as continuing to present high risk, despite the current reduction in loadshedding by Eskom, given the expectation of the State power utility's electricity tariffs being set to remain above the consumer price index.

The solar-power facility will be built adjacent to metallurgical complex and will feed power behind the meter into the Zondereinde system. The 220 GWh/y of upcoming energy represents about 15% of the group's energy requirement.

Northam uses most of its energy at the deep-level Zondereinde mine-and-metallurgical complex, which absorbs a quarter of total group energy.

Being behind the meter means that it can't be curtailed, doesn't carry a wheeling charge and provides considerable resilience to any power disruptions going into the future.

"We keep working on looking at other opportunities, whether they be solar or wind, and we're also looking at batteries, with watching briefs as prices for those various technologies change over time," Northam renewables programme lead Damian Smith explained to Mining Weekly during Northam's roundtable media conference.

Also at Zondereinde, six newly commissioned diesel generators, each with a capacity of 4.6 MW, are in place.

"Current market conditions demand a cost response, and at group level, we have a moratorium on recruitment, except for essential safety and line production occupations," said Dunne.

Long-dated Three Shaft surface infrastructure at Zondereinde has been delayed, raise-boring has been reduced to one machine, from two, and deepening development below 17 level ore tips has been halted.

At Booysendal, the South Merensky module has been halted and the BS4 decline temporarily halted.

At Eland, the Kukama decline has been restarted on a just-in-time basis and long-dated surface infrastructure delayed.

STRONG OPERATIONAL PERFORMANCE

A strong operational performance allowed the Johannesburg Stock Exchange-listed Northam to post record production and record sales volumes.

Despite further PGM price weakening, revenue of R30.8-billion was generated.

"In light of the high degree of uncertainty in the current metals markets, we'll continue to be internally focused. Cash conservation and preservation remain particular focus areas," Dunne added.

The board has declared a final dividend of 70c a share, bringing the total dividend for the year to R1.70 a share.

"The focus of our growth strategy is developing, moving from building and diversifying our mining assets to expanding and optimising our processing capacity," Northam CFO Alet Coetzee outlined.

"Our growth has necessitated an increase in the inventory we carry. This inventory is unencumbered, and we own its full value. Some of it sits within our furnaces, and this will remain but we are enacting plans to work through other stocks, one of which is our slag stockpile, and we recently commissioned our new slag plant," Coetzee explained amid the display of a milling section of that plant with a slag stockpile in the background.

Working through 800 000 t of slag will add 15 000 PGM ounces a year over the next four years.

Focus on cost resulted in Northam recording a significantly lower operating profit of R4.8-billion on a production of 892 876 oz of four-element PGMs.

Mining Weekly Editor Martin Creamer discusses mechanical cutting technology being positive for Master Drilling; developments at Gold Fields's South Deep mine; and Electra Mining Africa 2024 being billed the grandest in its 52-year history.