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Mining Weekly Editor Martin Creamer discusses the projected downward path of platinum; Petra Diamonds looking to refinance its $250-million loan notes; and Hive Hydrogen South Africa completing pre-front end engineering design on its green hydrogen to green ammonia project.

Diversified mining company Anglo American on Thursday emphasised its embedding of operational resourcefulness across its asset base and highlighted its second-quarter performance as being strong.

Moreover, the strategy reviewing Johannesburg- and London-listed centenarian described its copper production as "tracking well to the full year plan" and its asset divestment execution work as proceeding at pace.

"We've delivered a strong second quarter performance as we continue to embed operational excellence across the asset base," was the comment of Anglo CE Duncan Wanblad.

Minas-Rio in Brazil achieved record second quarter performance on the iron-ore front, steelmaking coal production increased by 26%, total Kumba Iron Ore sales increased by 3%, attributable share of Collahuasi copper production increased by 5%, output at Anglo American Platinum's Amandelbult platinum group metals (PGMs) mine increased by 7%, refined PGM production increased by 7%, PGM sales volumes increased by 14%, and in South Africa, diamond production increased by 8% as the Venetia mine transitions underground.

"Our copper operations in Chile and Peru both performed well against our plans. We are focused on continuing to deliver our strategic priority of operational excellence - improving performance stability is driving increased confidence in operational plans, including production volumes and unit costs.

"De Beers' diamond production reflects the lower revised guidance announced in our first quarter production report. Trading conditions became more challenging in the second quarter as Chinese consumer demand remained subdued.

"With higher than normal levels of inventory remaining in the midstream and an expectation for a protracted recovery, we are therefore actively assessing options with our partners to further reduce production to manage our working capital

and preserve cash," said Wanblad in a release to Mining Weekly.

At the end of June, the Grosvenor steelmaking coal mine in Australia experienced an underground fire and as a result of the incident, the operation is suspended and Grosvenor's production is excluded from steelmaking coal guidance for the second half of the year.

"In May, we announced our plan to accelerate our strategy by simplifying the portfolio and focusing on our world-class assets in copper, premium iron-ore and crop nutrients.

In working to execute on the asset divestments, including steelmaking coal, it is intent on minimising frictional costs, mitigating execution risks, and enabling the delivery of sustainable cost savings.

"Work is progressing with the aim of substantively completing this transformation by the end of 2025," Wanblad added.

Iron-ore production guidance for 2024 is unchanged at 58-62-million tonnes (Kumba 35-37 million tonnes; Minas-Rio 23-25 million tonnes). Kumba is subject to third-party rail and port availability and performance.

Iron-ore unit cost guidance for 2024 is unchanged at $37/t, with Kumba at $38/t and Minas-Rio at $35/t.

PGM production guidance for 2024 for metal in concentrate and refined production is unchanged at 3.3-3.7-million ounces.

Production remains subject to the impact of Eskom load-curtailment, of which there was none in the second quarter. Unit cost guidance for 2024 is unchanged at $920/PGM ounce.

The disposal of the 50% interest in Kroondal has resulted in Kroondal moving to a 100% third-party purchase of concentrate arrangement and transition to a toll arrangement in the second half of this year.

Rough diamond production decreased by 15% to 6.4-million carats, primarily reflecting the lower production guidance announced in the first quarter production report in response to the higher than normal levels of inventory in the midstream, and the expectation for a protracted recovery in demand.

Demand for rough diamonds recovered slightly at the start of 2024 following the cessation of the voluntary moratorium on rough diamond imports into India in late 2023, and improved demand for d...

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Having reset its cost base, delivered new life-of-mine plans with a smooth capital profile, the focus of Petra Diamonds is very much around refinancing its $250-million loan notes.

"We plan to get that done before the end of this calendar year," Petra Diamonds CEO Richard Duffy outlined to Mining Weekly in a Zoom interview. (Also watch attached Creamer Media video.)

The refinancing of the loan notes will place the London-listed, Africa-active diamond mining company in a position to execute on the growth potential of its long-life assets.

These are iconic Cullinan diamond mine in Gauteng, the Finsch mine in the Northern Cape, and Williamson mine in Tanzania.

It will also allow the company to begin to execute on its value-led growth strategy presented by not only its existing asset base, but also through other opportunities.

"We'll be able to deliver and leverage what we believe will be a much more supported market from next calendar year," Duffy commented.

The main focus of Petra's recent investor day was to demonstrate the resilience of the business through steps implemented over the recent months.

The key features were cutting the cost base by $30-million on a sustainable annualised basis.

Through mine replanning, it has also smoothed its capital profile going forward basis to around $100-million a year or less.

The main reason was to ensure that the business is cash generative from this financial year (FY) 2025 and refinance its loan notes, which mature in March 2026, before this calendar year-end.

Mining Weekly: What, specifically, were the life of mine updates and what does this mean for production as well as the future of Petra?

Duffy: In the case of Cullinan mine, we have a board-approved mine plan that goes through to 2033, and the potential through further extensions in the mine itself to be mining beyond 2050. At Finsch mine, we highlighted that the board-approved mine plan sees mining through to 2032 but with the potential to continue mining below the current Block 5 through to 2040. Williamson has an approved mine plan to 2030 with extension opportunities and growth opportunities well into the 2040s. We also provided guidance for the next five years so that we could create some visibility in terms of our production, which we see growing from the current levels of around 2.8-million carats annually to around 3.5-million carats a year by 2028. Most of that growth comes from increasing grade, both at Cullinan and at Finsch.

You speak of a lower-for-longer diamond market, how does that impact Petra?

What we're seeing is a diamond market that we expect will continue to remain a little softer through to the end of this calendar year. We took measures towards the end of last year in recognition of what we expected to be a weaker-for-longer market. The steps we took back in October 2023 around deferring some of our capital spend and initiating that cost savings programme meant that we were able to reduce net debt by $11-million from the end of December 2023 to the end of June 2024, the end of our FY 2024. The measures taken ensured that we stopped any cash burn in the business, even in a tougher market. The steps we've taken around costs and smooth capital profile mean that we'll continue to be resilient as a business, and be cash generative from this financial year 2025 onwards. So, we're well placed to benefit from an improving market, which we expect to see from next calendar year.

What makes you are more confident about the market in the medium- to long-term?

What we've seen in the market is the culmination of a number of factors that have created some headwinds for us, and that really has been on the back of the higher interest and inflation rates that have been a little more stubborn than expected, the slower return of demand from China, which is an important market for diamonds, and the disruption caused by the rapid growth of lab gro...

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Under current market conditions, many platinum mines will close prematurely owing to a lack of financial resources - and even without financial constraint, closure of depleting mines will result in platinum availability being considerably below the level that has prevailed for the past quarter century, Minerals Council South Africa VP Paul Dunne informed last week's Shanghai Platinum Week audience.

Displaying a graph projecting two global platinum scenarios, Dunne said the lower declining darker dotted line shown in the image above would be platinum's downfall should current platinum group metals (PGM) pricing persist.

The slide depicts the newly mined platinum production over the last 24 years in the solid line, as well as two scenarios of future milled platinum production.

The likely best first orange dotted line scenario depicts the view of milled platinum production when there are no financial constraints and mines cease to produce owing to reserve depletion.

"This is the maximum production, in our view, without new projects," Dunne said of the dotted orange line, which includes supply projection from mines that have been announced and started, as well as those in production now.

But even as can be seen from the dotted orange line projection, current mining investment will not be able to offset the loss of production from the old mines passing on, Dunne spelt out as CEO of Northam Platinum, which has grown by more than 300% since 2014.

The second scenario, shown by the darkish dotted line, illustrates the projected production collapse on the way if the current uneconomic PGM prices persist.

Anticipated is that many mines will be closed prematurely owing to a lack of financial resources.

"Under current market conditions, the blue line can be so," Dunne reiterated, while conceding that the eventual outcome may be somewhere in between, but still worryingly down.

This graph shows our view of future mined palladium production across the world.

The same two scenarios were also shown for palladium production across the world, albeit with the palladium PGM falling at a slower pace than forecast for platinum over the next 20 years, owing to the relatively smaller exposure palladium production has to Southern Africa's economics.

But, in an economically constrained scenario, the closure of high-cost palladium mines is foreseen.

The rhodium graph is similar to the platinum graph, amid the significant amount of rhodium produced by upper group two, or UG2, mines on the western limb of South Africa's well-endowed Bushveld Complex.

"These mines are now nearing the end of their lives and are anticipated to become less competitive as production starts to fall," Dunne projected further, while emphasising the loss to planet earth of the falling projected availability of PGMs.

"PGMs are very, very special metals. They are very rare and are only found in a few places around the world.

"Their unique catalytic chemical properties are used to make the world a better place," Dunne said while displaying a slide with an iridium chloride background.

"Iridium is one of the rarest elements on earth, and was named after Iris, the Greek goddess of the rainbow.

"Iridium, together with the ruthenium, were historically considered the minor PGM metals, but their importance is growing, in particular, in the hydrogen economy," Dunne pointed out.

MANY VALUE-ADDING STAGES

Producing pure PGM metal begins with the mining of ore deposits that typically contain a low concentration of the metals, two to five parts per million, two to five grams per ton.

Following this, the mined ore passes through five stages of physical and chemical beneficiation, ultimately producing high-purity, stable, and saleable PGMs.

To do this, tens of thousands of Southern Africans are employed and very many terawatts of electricity are deployed.

Along with the PGMs often comes valuable base metals and millio...

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With market fundamentals providing pricing support in the medium- and longer-term, London-listed diamond mining and marketing company Petra Diamonds expects diamond prices to show modest recovery in the new year.

The company expects current diamond market weakness to continue through to the end of the calendar year with some price volatility.

"We're looking forward to addressing the challenges ahead of us from a position of strength, with world class assets that have long-term potential, strong sustainability credentials and an ability to withstand market and capital cycles," Petra CEO Richard Duffy stated in a release to Mining Weekly.

The company's portfolio of mines incorporates interests in the Cullinan, Finsch and Koffiefontein underground mines in South Africa, and the opencast Williamson mine in Tanzania. Koffiefontein is on care and maintenance in preparation for a possible sale.

During the company's 2024 financial year (FY) to the end of June, 36% more diamond carats were sold than in FY 2023, uplifting revenue by 13%.

This increase was driven by Williamson ramping up to steady state and the planned benefit of the delayed sale of the final tender in FY 2023.

Yearly production was below revised guidance at 2.73-million carats.

Ore processed increased to three-million tons from 2.9-million tons, with the Williamson ramp-up increasing production by 0.1-million tons and a steady quarter at Cullinan and Finsch.

Owing to the increasing contribution from 78-Level Phase II, improvements in grade recovery continued at Finsch, where work to resolve the winder issues and the transition from continuous operations to a two-shift, five-day configuration has reduced carats recovered when compared with FY 2023.

Revenue, including revenue from profit share arrangements, amounted to an increased $113-million on the extension of Tender 5 receipt timing.

Operational fourth-quarter capital expenditure totalled $18-million, and net debt decreased to $201-million.

Petra is guiding production of 2.8-million to 3.1-million carats in FY 2025.

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Huge demand for green ammonia from power stations is being seen by the developer of South Africa's R105-billion green hydrogen to green ammonia project in the Eastern Cape.

Hive Hydrogen South Africa, chaired by for Eskom CEO and former Standard Bank chairperson Thulani Gcabashe, has progressed from mid-stage to advanced-stage development with Phase 1 of the far-reaching green hydrogen to green ammonia project at the Coega Industrial Development Zone, in Gqeberha, Nelson Mandela Bay.

"This is a really exciting time for us," Hive Hydrogen GM Colin Loubser enthused in a Zoom interview with Engineering News & Mining Weekly. (Also watch attached Creamer Media video.)

With the renewable energy green electron assets proceeding to plan, Hive has completed front end engineering design or FEED studies on the green hydrogen molecule portion and has begun the request for information process with all the engineering procurement and construction companies, both global and local.

In addition to maritime market demand burgeoning exponentially for green ammonia to enable unacceptable sea pollution to be brought to an end, the world is seeing an unexpected revolution in the power side.

"We've started to see ammonia turbines coming out that are ready for deployment, so we see green ammonia power stations replacing coal-fired power stations and new power station demand for green ammonia, and that's a really exciting development.

"We spoke recently to a European project that would require all our annual production of green ammonia to fire a green ammonia power station they're planning. This nascency of the market has started to mature now into an early-stage industry. It's starting to find traction now in global plans.

"The hottest topic is how green ammonia is going to reshape particularly the maritime industry, which is a heavy polluter of the oceans. The use of heavy fuel oils and diesels not only pollute the air, but spillages also pollute the water and there are big carbonisation issues.

"We're seeing, in looking at the shipping industry now, the number of ships that have been commissioned to run on green ammonia as a maritime fuel is exponentially increasing. The technology readiness levels of the green ammonia engines for shipping have reached technology readiness level nine, which means they're bankable and high quality," said Loubser.

Another key advance has been the visit of strategic investors to South Africa. "We've had a delegation of 19 people from Japan. We've got a few more delegations coming in from Europe, and potentially from the US as well. The project has a lot of momentum, and it's moving at the right pace, and in the right direction."

Hive signed a memorandum of cooperation with Itochu in December last year with offtake being spotlighted.

"Almost a daily activity in my life is talking to offtakers. That's going exceptionally well. We're very confident of European and Far East offtake.

"In the next couple of weeks at the most, we'll see direction of how contracts will look for Korea and Japan.

"We're also seeing huge shifts in green ammonia demand out of the fertiliser industry in Europe and more and more by industry looking to cracking ammonia back to hydrogen.

"We 're very focused on Japan, Korea and on the green fertiliser industry in Europe. What is exciting for future phases and maybe even a little bit for the first phase of our project is the increase of South Africa's interest in offtake in South Africa. We have to find a balance on that, and have to fit into all the regulatory regimes that Japan and Korea are now implementing, and Europe similarly.

"So, it's really good timing. We've anticipated the nascency of the marketplace well, it's now emerging as a proper plan, and, luckily, we think we've called it correctly," Loubser added.

Will funding still be a combination of 70% debt and 30% equity and is the final investment decision (FI...

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Toronto- and New York-listed Platinum Group Metals, the near-term objectives of which are to advance the Waterberg Project in Limpopo to a development and construction decision, is working with the South African government to analyse the possibility of exporting platinum group metals concentrate.

An initial trade-off study has been completed to determine the viability of exporting the concentrate from South Africa to Saudi Arabia and a key requirement would be to secure a long-term permit for the export from South Africa of unrefined precious metals in concentrate, the company stated in its third-quarter results report on Thursday.

The Waterberg project is planned as a fully mechanised, shallow, decline access platinum, palladium, rhodium and gold mine, including by-product copper and nickel production.

A cooperation agreement that Platinum Group Metals, headed by CEO Frank Hallam, has with Ajlan & Bros Mining and Metals to study in three phases the establishment of a stand-alone PGM smelter and base metals refinery in Saudi Arabia encompases a:

global PGM concentrate market study currently in process that includes the sourcing of global concentrate to minimise one-project risk;

definitive feasibility study (DFS) for the construction and operation of the PGM smelter and BMR in Saudi Arabia; and

option to form a 50:50 joint venture following the completion of the smelter DFS, which will assume the export of PGM concentrate from Waterberg to a port facility in Saudi Arabia.

PLATINUM BATTERY ADVANCING

The Lion Battery initiative involving the use of platinum and palladium in lithium battery technologies continues to be advanced in collaboration with Anglo American Platinum and Florida International University of the US.

The Battery Innovation Centre in Newberry, Indiana, US, has been engaged to help to drive commercialisation efforts for the next generation platinum and palladium based battery chemistries.

Proprietary lithium-sulphur and enhanced lithium-ion technology using the catalytic properties of platinum and palladium are progressing.

Independent small- and large-scale trials to validate Lion's proprietary platinum and palladium based electrode composition, slurry, and films in both lithium-sulphur and lithium-ion coin and pouch cells fall under a scope of work that the Battery Innovation Centre is conducting.

Collaboration with the centre includes additional research and development on improving performance and scale-up with the goal of creating prototypes for commercialisation consideration this year.

Lion's target is to develop batteries with specific energies that are 20% to 100% higher than current technologies while meeting or exceeding their present cycle lives.

LATEST FINANCIAL RESULTS

During the nine months ended May 31, a net loss of $4.02-million compared with $4.05-million in the corresponding period of last year.

General and administrative expenses during the period were lower at $2.57-million and share based compensation higher at $1.61-million.

Total expenditures on Waterberg in the nine months were $2.3-million and total expenditures on the property since inception were $88.1-million.

Mining Weekly Editor Martin Creamer discusses the need to put to work South Africa's mineral endowment and public market advantages; the collaboration between Johannesburg-listed Orion Minerals and Utshalo; and mining’s dormant gold analyser that could be a potential gold optimiser.

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For 30 years, 800 people at the now defunct Chamber of Mines Research Organisation (COMRO) devoted intense ongoing effort to research and development to advance mining in general and gold mining in particular.

However, during a period of very tight gold-price constraint, COMRO ceased to function in the form it had to three decades at a time when a promising portable X-ray fluorescence instrument was entering the final stretch of its developmental journey.

The portable gold analyser in question is able to quickly tell one the grade of the gold in an underground stope.

All one does is move it across the rockface and it can tell one whether it is worth mining what may look like uneconomic reef.

With the gold price and global technology both at all-time highs, South Africa's gold mining industry is seen as having major additional revenue potential from a revival of what was intensively researched and developed but could not be seen through its last stretch to the finish line.

This has been highlighted by Brian Protheroe in the book COMRO's Legacy.

"At the time, a number of industry members thought that it was an exceptional piece of equipment that had huge potential benefits," Protheroe recalled in a Zoom video interview with Mining Weekly this week. (Also watch attached Creamer Media video.)

But knowledge of it today is far from being great and at a meeting Protheroe had at one of the gold mines the other day, young mining engineers were not even aware of the ruggedised gold-grade instrument locally developed by what was one of the largest privately funded mining research and development organisation in the history of the world.

"At the time, there was a fine balance between the gold price, the working cost of mining the gold, and the grade of the gold, which is the amount of gold in the rock being mined.

"The industry was unable do a great deal about the very low gold price, which in the 80s and 90s was about $400 a ton, and it fluctuated greatly.

"Wanted was a more accurate, reliable and quick method of measuring the amount of gold in the reef being mined," Protheroe reminisced.

To get one, COMRO formed a project team and collaborated with an international instrument manufacturer to develop the portable X-ray fluorescence instrument for rapid gold measurement.

The organisation tested prototypes in laboratory and field conditions and created procedures for analysing various gold, uranium, lead, iron, carbon, silica elements in the reef.

The instrument was made portable computer compatible and the prototype showed great potential, especially on wide, low-grade reefs and those with coarse-grained gold, with grade estimates from the analyser closely matching traditional chip sample estimates.

A more accurate, reliable method was wanted. That's where the work started on developing an improved method that enabled information to be sent quickly to enable management to avoid mining reef that had too little gold in it.

What was involved in the development and testing of prototypes?

We put a team of experts together in collaboration with an external equipment manufacturer, which was our way of undertaking research. We looked at what was available, and the route followed was looking at developing a portable X-ray fluorescence instrument. The four instruments produced were laboratory tested in simulated mining conditions over a long time and issues like intrinsic safety and radiation needed addressing. Field evaluation was extensive with tests on gold, uranium, lead, carbon, and silica to obtain background X-ray fluorescence information to outline the gold, and a prototype was developed.

How was implementation and use in mines undertaken?

Because it was a new method of evaluating the grade of gold in the rock, they actually required a change in organisational structure in the traditional mining process. This involved doing in-situ analysis of the gold at th...

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With South Africa's mineral endowment and its public capital markets being two of its greatest advantages, both need to be put to work in a manner that is common in other global mining jurisdictions, Utshalo founder Paul Miller emphasised at Wednesday's collaborative opening of the way for smaller investors to increase their shareholdings in the Northern Cape's attractive copper endowment.

In this case, collaborative initiative brings Australia Stock Exchange (ASX)-style shareholder participation to smaller South African shareholders through the Johannesburg Stock Exchange (JSE), implemented by Utshalo and the Johannesburg- and Sydney-listed Orion Minerals, headed by CEO Errol Smart. (Also watch attached Creamer Media video.)

"We've not had the kinds of incentives that encourage both exploration and investment via public market, like flow through shares, for example, in other markets. But hopefully here, by the industry itself working together, this will happen.

'We need to get money into the ground, get projects built. You develop the public markets to support those projects, and then get people to work," Miller outlined.

"I think this will be well supported, particularly because it's in the money. We're trading at 20 cents, and you can buy at 18 cents direct from the company, without paying any brokerage fees," Smart highlighted the online webinar covered by Mining Weekly.

JSE- and the ASX-listed Orion has 23 000 South African shareholders and in undertaking a capital raising to progress its Prieska Copper Zinc Mine and Okiep Copper Project in South Africa's Northern Cape.

Eligible South African shareholders, those holding shares on June 28, may now participate in Orion's latest share purchase plan (SPP) in same way as Australian shareholders. There is no equivalent to a SPP in South African public markets and if South Africa's public markets are to regain their vibrancy, we need to adopt more practices from those markets that are like the ASX. Orion, as an ASX primary listed company, subject to ASX listing rules, is showing the way," Miller, who has experience as an approved JSE sponsor executive, stated in a release to Mining Weekly.

"I'm really proud of the fact that Orion is now almost majority South African owned. If I look at the share register, where we can see the actual individual shareholders by name and address, it certainly appears to be the case that the majority of Orion shares are held by historically disadvantaged South African HDSA shareholders.

"Probably more than 25% of Orion is owned by HDSA people on the listed stock exchange, not because we were forced to do it, but because it's good business practice, so it has worked for us.

"What is important is that I have a company that's worth R1.3-bilion, R1.4-billion that's 50% South African retail owned.

"So, we've got R700-million rands worth of shares in the hands of retail South African shareholders that are willing to trade and actively get involved in exploration and mine development.

"Surely that tells us that there is an appetite. We've got to create the structures that make brings that source of capital together with the miners and explorers that need that capital so that we can go forward.

"This is a bit of an experiment. I hope it opens that door. I think it will, and previously, we were very pleased. In 2020, we were bowled over by the support that we got from the JSE. I think we ended up getting the equivalent of A$1.3-million at the time, without even marketing," Boksburg-born Smart remarked from Springbok, in the Northern Cape.

Orion has just finished a trial mining programme at the reviving Prieska mine and has a bankable feasibility study team at Okiep.

In addition to a placement of 513-million shares at A$0.015c a share to sophisticated and professional investors, eligible South African shareholders will also be allowed to subscribe to the SPP will be undertaken...