[miningmx.com] – ATLATSA Resources said it was weighing the “future shape” of its Bokoni mine in the north-eastern Bushveld as a strike, now in its 50th day, increased debt and forced a rethink on a refinancing plan.
“We want to see how we’re going to scale this mine given the labour complement and the open-cast potential we have,” said Joel Kesler, chief commercial officer of Atlatsa Resources in a telephonic interview today.
He was commenting as a strike at the company’s mine, first called on October 1, dragged on at a cost of R5m in lost revenue daily. Atlatsa’s 50% share of essential services cost an additional R1.5m daily with joint venture partner, Anglo American Platinum (Amplats) carrying the balance of the cost.
Kesler said the combination of lost revenue and costs would increase the company’s overall debt, estimated at R3bn in February when it first unveiled a refinancing plan with Amplats that would see the partners recapitalise Atlatsa to the tune of R5bn.
In addition to refinancing debt, capital would also be pumped into Bokoni to turn it into a 300,000 ounce per year mine from the current 100,000 oz/year.
“The mine was already marginal going into the strike. We will see the negative effects of it mostly in the first quarter of next year as we have a nine week lag on revenue,” said Kesler. “But we have to see what we’re going to look like at Bokoni going forward from a technical point of view,” he said.
Significant progress had been made in community negotiations regarding the strike in which some 2,400 employees were eventually dismissed. Criminal charges were also laid against some member of the Bokoni Labour Forum (BLF) who initiated the strike and allegedly perpetrated acts of violence and damage on the mine.
“With the BLF out of the picture, at least for now, we can set about resolving the situation on the mine,” Kesler said. No employee demands had been submitted to management apart from a call by the BLF on October 2 for recognition at the mine. “The NUM and Tawusa are both on board with us,” said Kesler.
A recruitment campaign had also been started. Prior to the dismissal of 2,400 workers, Bokoni mine had a total of 3,587 full-time employees and a further 1,880 employed on a contract basis as per the close of the third quarter.
The strike is the last in South Africa’s precious metals sector after Amplats agreed the return to work of its employees at its Amandelbult and Union sections last week. The last of the gold sector strikes were resolved when work resumed at AngloGold Ashanti’s Mponeng mine last week.
In the third quarter, which was largely spared the effects of the strike, Bokoni posted a 16% improvement in platinum group metal (PGM) production year-on-year of 38,819 oz and a 14% improvement quarter-on-quarter.
As volumes increased, costs fell. The operating cost per PGM ounce produced at R9,577/oz was 3% lower year-on-year and an impressive 7% lower quarter-on-quarter. It was the mine’s best-ever performance since Atlatsa took over management of the mine in 2009.
Given the extent of the refinancing, Atlatsa continues to trade under a cautionary notice to shareholders.
The company said earlier this year that its Bokoni operations would not be affected by an operational review of mines owned by Amplats.
However, Kesler said it only made sense to make the mine look as sharp as possible against the backdrop of the review.
