JOHANNESBURG (miningweekly.com) – Platinum group metals (PGMs) mining company Royal Bafokeng Platinum (RBPlat) has declared a R1.5-billion interim dividend in addition to the R482.3-million buy-back and redemption of a portion of its convertible bonds on the back of a record performance in the six months to June 30.

RBPlat increased half-year PGMs production by 24.3% to 215 700 oz of four element (4E) production and second-half group capital expenditure is forecast to remain unchanged at approximately R2.2-billion.

Revenue in the six months increased by 108.1% to R9 584.3-million, supported by strong PGM basket prices and business growth.

Earnings before interest, taxation, depreciation and amortisation (Ebitda) increased by 163.4% from R2 087.8-million to R5 499.1-million, with the Ebitda margin increasing to 57.4% from 45.3% in the previous comparative period.

RBPlat’s consolidated gross profit increased by 322.8% to R5 161.5-million from R1 220.7-million in the corresponding period of last year, with a return on capital employed of 15.5% compared with 5.3% in 2020.

“Over the last ten years, we’ve seen our business grow to operate two world-class mines and concentrators while also securing our full ownership of the business. This transformation and growth of our business is built on our focused strategy, and further underpins our strategic shift in focus from organic growth to further enhancement of our operational excellence and flexibility,” RBPlat CEO Steve Phiri stated in a release to Mining Weekly.

RBPlat mines PGMs in the Merensky and upper group two (UG2) reefs on the Boschkoppie, Styldrift and Frischgewaagd farms in the Rustenburg area, which have been identified as hosting the last undeveloped Merensky reef on the western limb of the Bushveld Complex.

Despite the continued impact of the global Covid-19 pandemic, a significant improvement in the PGMs market, coupled with operational performance, resulted in headline earnings increasing by 464.7% to R4 870.8-million.

Headline earnings a share increased to 1 831.9c, up from 335.3c in the corresponding period of last year.

Basic earnings a share were 1 840.2c compared with 338c in 2020.The Group ended the period with cash and cash equivalents of R4 135-million, up from R2 673.1-million last year.

Guided by its dividend policy and taking into account the strong balance sheet and first-half cash flow generation, the board declared an interim gross cash dividend of 535c a share, equating to the R1.5-billion.

PRODUCTION

Notwithstanding an increase in tonnes hoisted, milled and metals in concentrate compared with the first half of last year, overall performance in the first half of 2021 did not meet RBPlat’s expectations with Covid disrupting operational and project construction performance in both the first and second quarters.

Total development increased by 28%, or 4.2 km, to 19.2 km, with BRPM development increasing by 4.3 km to 16.5 km and Styldrift development decreasing by 0.1 km to 2.7 km.

Stoping activity for the reporting period amounted to 326 000 m², a 17.7% increase, which resulted in a 20.7% increase in total first-half tonnes hoisted to 2 158 000 t.

Styldrift tonnes hoisted increased by 20% to 1 020 000 t, whilst BRPM tonnes hoisted increased by 21.3% to 1 138 000 t, compared with the lockdown-impacted first half of 2020.

Styldrift tonnes hoisted have steadily increased during the second quarter with an average of 184 000 t a month being hoisted, equating to a 17.9% improvement.

Total tonnes milled increased by 33.1% to 2 160 000 t with Merensky contributing 1 623 000 t and UG2 537 000 t. BRPM tonnes milled amounted to 1 172 000 t with UG2 accounting for 46% of the mines mill volumes. Styldrift tonnes milled increased by 39.2% from 710 000 t to 988 000 t. Toll treatment tonnes amounted to 200 000 t.

Of the PGMs production increase, BRPM contributed 116 100 oz of 4E production, an increase of 16.4% and Styldrift’s production increased by 35% to 99 100 oz of 4E production.

PROJECTS

Continued progress was made on the Styldrift project during the reporting period with the completion of the final 230 000 tonne-a-month footprint infrastructure, with an additional two stoping sections being equipped during the reporting period bringing the total number of equipped sections to 18. The remaining life-of-mine scope of works related to establishing additional pumping redundancy, optimising logistics and remaining ancillary services are expected to be completed during the second half of 2021.

Construction of works to increase BRPM’s tailings storage facility (TSF) continued steadily during the reporting period. The TSF completion date remains quarter one of 2022. Capital expenditure for the TSF upgrade during the reporting period amounted to R97-million.

The Maseve operation’s 180 000 t a month MF2 upgrade was Covid impacted, resulting in construction delays and remedial civil works required on the secondary mill base. The upgrade is now forecast to be completed in the fourth quarter of 2021. Capital expenditure on this project for the period amounted to R75-million.

ENVIRONMENTAL STEWARDSHIP

As a PGMs producer, RBPlat acknowledges that its activities have an impact on climate change through the release of greenhouse-gas emissions and addressing the causes and impacts of climate change is core to its business strategy.

It has set five-year group energy and water efficiency targets including carbon intensity targets in 2020. These targets are based on the 2018 baseline, with the aim of achieving a 10% reduction by 2024.

A detailed energy assessment has been conducted by independent service providers to establish energy-use profiles and identify energy savings opportunities. The feasibility study for the construction of a modular photovoltaic plant for renewable energy will be concluded in first half of 2022.

RBPlat has reduced potable water cost by R4.5-million during the first half of 2021 by using water from its water treatment plant. The water treated in this plant amounted to 392.62-million litres (with an average of 2.26- million litres of water treated a day). This represents 38.7% of potable water consumed at the BRPM concentrator plant during the reporting period.

OUTLOOK

RBPlat is committed to continuing to focus second-half efforts on improving its key injury frequency rates in support of creating a zero harm operating environment.

Its key operational focus areas will be aimed at developing operating maturity to leverage the infrastructure capabilities of Styldrift.

“Our operational focus will be on improving the consistency with which crews meet production targets for stoping and development by maintaining focus on our key operational metrics,” the company stated in the release.

Production guidance for the full year is revised to between 4.60-million tonnes and 4.75-million tonnes at a 4E built-up head grade of between 3.90 g/t and 3.93 g/t. Production is expected to be between 475 000 oz and 485 000 oz 4E metals for the year. Total cash operating costs per 4E ounce for the group are forecast to be between R15 825/oz and R16 150/oz.

“Our committed employees, strong board leadership and robust balance sheet and capital allocation discipline, continue to provide a platform for enhanced value for all our stakeholders and sustainable capital returns to shareholders, despite the challenges of the global health pandemic and other operational challenges this year,” said Phiri.