[miningmx.com] — ANGLO Platinum’s (AngloPlat) Mogalakwena open cast mine near Mokapane is likely to increase output from the 237,000oz of platinum produced in 2009 to around 400,000oz “within the next few years.’
That’s according to general manager Ted Muhajir who told financial media on Wednesday during a site visit that the mine’s planned ramp-up to the 400,000oz level had been set back by the drastic cost-cutting measures required in 2009.
Last year Mogalakwena chopped its mining volumes to 32.9 million tonnes (mt) from the 2008 level of 101.8mt but still increased platinum production by 26% on the 2008 level of 188,104 oz.
That was achieved by using surface stockpiles of lower grade ore to meet the shortfall in output from the mine.
According to JP Morgan Cazenove analysts Steve Shepherd and Allan Cooke, “Mogalakwena is now the group’s flagship mine – promising to be its lowest cost source of platinum group metals (pgm).
“The mine has reserves of 52.4moz 4PGE (four platinum group elements) and resources of 198moz 4PGE which is almost identical in size to Impala Platinum’s inventory in Zimbabwe. The life of mine (LOM) reserve life is 62 years, by our estimates.’
Muhajir put the LOM at 39 years based solely on the development of the third – and newest – open pit operation also called Mogalakwena.
The pit is currently 1,5kms long, 100m deep and 350m wide. It will eventually reach a planned length of 7kms, a depth of 500m and a width of 1.2kms.
But the mine also controls another 14kms of ground containing extensions of the platinum-bearing Platreef which can be mined from surface meaning opencast operations could continue here for well over 100 years.
Muhajir pointed out that not only is Mogalakwena the lowest cost producer in the AngloPlat group but it also has the highest revenue in terms of its “basket price’.
Platinum mines report their revenues on the basis of a “basket price’ per platinum ounce sold which takes into account the platinum revenue plus all other revenues earned from the sale of by-product metals such as palladium, rhodium, copper and nickel.
Mogalakwena has a lower platinum grade than the group’s Rustenburg mines but the ore contains much higher levels of copper and nickel.
Muhajir said Mogalakwena’s basket price currently sits around R25,000 per platinum ounce sold compared with the AngloPlat group average of around R19,600.
AngloPlats strategy has been to retain 100% ownership of Mogalakwena in terms of the new mining legislation by doing black economic empowerment deals on some of the other assets it controlled.
These were the deals over Northam Platinum and Booysendal struck with Mvelaphanda Resources; over Lebowa Platinum and Ga-Pasha with Anooraq Resources and over the Bafokeng Rasimone mine with the Royal Bafokeng Nation.
Despite all this Anglo Platinum has still not received final conversion of any of its old order mining rights into new order mining rights from the Department of Mineral Resources (DMR).
The delay has caused some apprehension in the market that the group may still be under pressure from government to do further BEE deals to secure conversion.
That’s denied by Anglo Platinum CEO Neville Nicolau who told Miningmx, “we have done enough to secure conversion and are not being pressured to do more.
“The continuing delay appears to be administrative and you have to remember that the deal with Anooraq over Lebowa was delayed and only became effective in July last year.’
According to Shepherd and Cooke, “AngloPlat is the best positioned of the major platinum producers to respond to the improving pgm demand fundamentals that we (and the platinum miners) see.
“AngloPlat remains our preferred major platinum exposure.’