Ralph Havenstein, CEO, Norilsk Nickel Intl.
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Plaudits for Anglo Pt/Xstrata venture
Brendan Ryan
Posted: Wed, 03 Aug 2005

[miningmx.com] -- BARELY a week after saying he was looking at further "pool and share" joint ventures, Anglo Platinum CEO Ralph Havenstein has unveiled another one; this time with Xstrata Alloys, part of London-listed Xstrata.

The move has been welcomed by South African analysts as a refreshing new initiative by Anglo Platinum to expand its production in a more cost efficient way than it can achieve operating on its own.

Anglo Platinum negotiated its first pool and share deal in 2003 with Aquarius Platinum based on Aquarius’ Kroondal mine. It announced a second such deal with Aquarius based on its Marikana mine in July.

Said Andisa Securities analyst Nic Dinham: “It’s an excellent development showing that Anglo Platinum is intent on mobilising its reserve base and is prepared to outsource the mining operation.”

JP Morgan analyst Steve Shepherd said it seemed Havenstein was embracing a "new way forward" through the pool and share agreements. “This promises to deliver low risk and competitive mines where Anglo Platinum’s own engineers have until now come short,” he said.

The new project is called the ‘Mototola Joint Venture’ and it will develop a platinum mine and concentrator on the eastern Limb of the Bushveld Complex near the town of Lydenburg. The total capital expenditure for the project is estimated at R1,35bn to commissioning which will be split equally between the two partners.

The mine is expected to produce 132,000oz of platinum and 82,000oz of palladium in concentrate annually milling 200,000 tons/month of ore over a life of mine estimated at 20 years.

Anglo Platinum is contributing platinum group metal (pgm) reserves on the farm Richmond - part of its Der Brochen project - while Xstrata is contributing platinum group metal reserves from its Thorncliffe farm. Xstrata already operates a chrome mine at Thorncliffe suppling chrome ore to its ferrochrome smelting plant situated just outside Lydenburg.

Xstrata will develop and operate the new underground mine using its expertise in mechanised room and pillar mining - the system it uses to mine chrome - while Anglo Platinum will build and manage the concentrator plant.
This promises to deliver low risk and competitive mines
Construction should start in the third quarter of this year with first pgm production expected in the last quarter of 2006 and full production by the third quarter of 2007.

Anglo Platinum will buy Xstrata’s 50% share of the pgm concentrates for smelting, refining and marketing. Xstrata will build a beneficiation plant at its own cost to process the chrome-rich tailings from the pgm concentrator and will also purchases Anglo Platinum’s share of chromium concentrate.

Shepherd said the capital budget for the mine was "competitive".

“The Thorncliffe management team will be capable of delivering a similarly good performance from mining assets as does Aquarius Platinum at the Kroondal joint venture with Anglo Platinum,” he said.

Anglo Platinum saves time and capex by accessing the deposit from Xstrata’s ground rather than coming in from its own property which would require a vertical shaft system, Dinham said.