Business Media MAGS   |   Welcome   |   About Us   |   Contact   |   Events   |   Terms & Conditions   |   Rates   |   Log in
Home  »  SA Mining   »   Moving Forward

Moving Forward

By: Brindaveni Naidoo

Platinum junior Wesizwe makes progress on Bakubung amidst challenging conditions.
Image: Bakubung Platinum Mine is set to commission phase one of the project in June 2017 Image: Bakubung Platinum Mine is set to commission phase one of the project in June 2017

North of the city of Rustenburg, in the North West province, a new platinum group metals (PGMs) mine – the Bakubung Platinum Mine (BPM) – located in the Western limb of the Bushveld Igneous Complex, continues to hold the flag of hope for junior miners in the country.

The Bakubung Platinum Mine – a new underground mine designed to access one of the last remaining sizeable and viable Merensky and UG2 PGM ore bodies – is a flagship project of JSE-listed Wesizwe Platinum.

Wesizwe Platinum is one of the few Chinese/South African partnerships for the development of a sizeable platinum mining venture in South Africa. Its major shareholder is a Chinese mining consortium – the Jinchuan Group Limited, as well as the CADFund (China Africa Development Fund).

An embattled global and South African economy and platinum sector, combined with the volatile markets, have impacted industries globally, including the operations of major mining companies. The exploration and junior mining market has also taken a knock, with some media reports describing this sector as an “endangered species”.

In fact, a report by Deloitte, entitled Tracking the Trends: The top 10 issues mining companies will face in the coming year, states that, as exploration dwindles, juniors continue to fight tooth-and-nail for survival. “Many junior miners are fighting for survival, trying feverishly to adapt – like plants in the desert, waiting for the rains to arrive.”

Jacob Mothomogolo, Wesizwe Platinum’s executive for projects, adds that overall global PGMs projects require about $14.3bn in capital expenditure to bring 185m ounces of PGM reserves into production by 2030; while South African projects account for $6.3bn to commission production from up to 60m ounces of reserves.

“The current economic slowdown has affected the demand for metals, as well as the investment appetite for mining projects. The weakening of developing countries’ economies and their currency cycle are adding to the downward pressures and scarcity of mining investments. Depressed demand and low prices have seen some resource companies losing up to 70% on their net asset value in the last three years, this makes it difficult to raise capital for new projects,” explains Mothomogolo.

Mothomogolo and Hamlet Morule, Wesizwe Platinum’s executive for corporate affairs and investor relations, are very aware of the struggle of junior miners across the globe. However, they attribute the success and sustainability of the BPM in a challenging market to strong leadership and management that brings to the table engineering expertise and guidance, as well as maintaining good relationships with relevant stakeholders.

Mothomogolo adds that the company has always worked on the model of being pro-active and not re-active to changing markets and commodity cycles. “However, owing to strong and proactive planning on a continuous basis, Wesizwe Platinum is constantly adapting and is surviving these difficult markets.”

One such change – that has taken into account the economic climate and the low price of platinum – is the decision taken by Wesizwe’s board to appoint contractors for the first ten years of the mine’s operation.

Mothomogolo explains that there is much value to be derived from a contractor miner at the early stage of a mining operation versus the owner-operated model. This includes higher levels of productivity, potential for removing debt burden through capital restructuring, major unit costs savings through efficiency. The company will be appointing two contractors – either locally or from abroad – by mid-2017.

He explains: “Wesizwe will still have a “hands-on” approach in working with contractors in the operation of the mine. Wesizwe Platinum will continue to be the custodian of the working culture and health and safety model implemented at the mine, including that for the contractors.”

Project update

Morule says that the company is making progress with its black economic empowerment (BEE) compliance.

Currently, Wesizwe Platinum has a 20% BEE ownership status. “We are working towards acquiring our 26% empowerment status and are in talks with the Department of Mineral Resources and the Bakubung Ba Ratheo tribe on how best to make up this 6% shortfall. We have not taken any decision as yet, but are in talks with prospective stakeholders to enable us to achieve our empowerment targets.”

Meanwhile, Kgomotso Tshaka, the company’s executive for sustainability, says sustainability remains a key strategic imperative for the company. The company is supporting the development of small businesses and the development of basic services and infrastructure.

Wesizwe Platinum, in partnership with the North West Human Settlements and the Social Housing Regulatory Authority, is busy with the development of a two-phased housing scheme comprising 801 units (phase 1) and 1504 units (phase 2).

With regard to the project, Mothomogolo says that, despite challenges experienced, the project is on track as per the optimised schedule of 2014.

Key milestones achieved with the project in 2016 included commencing with the commissioning of the main shaft and for the bulk water and electricity services and commencing with the housing project, as well as the completion of the bulk sampling programme and optimising the plant design to prepare for procurement and construction of the process plant.

Mothomogolo says the company will commission Phase 1 of the main shaft and will hoist the first tonnes from the mines in the second quarter of 2017. It will also commence with the procurement of the process plant and some surface infrastructure and installations will be commissioned. In 2018, the company aims to continue flat development and the commissioning of the Phase 2 and 3 of the main shaft as production build-up continues.

The main shaft will have a hoisting capacity of 250 000t of ore and 150 000t of waste a month. An initial 230 000t a month will be mined from the Merensky Reef, with the balance from the secondary UG2 Reef. After the Merenksy Reef is depleted, between 10 to 15 years from the start of production, the full 250 000t capacity will comprise UG2 ore only.

The BPM is scheduled to start production in 2017 and will reach full production in 2021, with a life-of-mine of 30 to 35 years.

Share This:



© 2018.
All rights reserved.