Name of the Project
Styldrift I expansion project.

Location
South Africa’s North West province.

Client
Royal Bafokeng Platinum, or RBPlat, (67%) and Anglo American Platinum (33%).

Project Description
The Styldrift project area is located about 5.5 km from the existing Bafokeng Rasimone Platinum Mine (BRPM).

The project will exploit one of the last major Merensky mining blocks on the Western Bushveld.

Styldrift I will deliver an underground operation, which will be accessed through a twin vertical shaft system, with the main shaft being sunk to 758 m and the services shaft to 723 m.

The configuration of the main shaft will allow for a single-deck personnel-and-material cage compartment that can transport 185 people; a cage counterweight compartment; two Merensky reef skip compartments, each designed to accommodate a 22 t skip; and two future skip compartments, each accommodating a 13 t skip. The services shaft will comprise a personnel-and-equipment cage compartment that can transport 22 people, and a cage counterweight compartment.

Four winders will be used during the project construction phase and three during the production phase.

The height of the main shaft headgear is 58.6 m and the service shaft 41.3 m. Concentrator capacity will be 2.76-million tonnes a year.

The mine will process 230 000 t/m of Merensky reef and 20 000 t/m of waste at steady state.

Jobs to be Created
Not stated.

Net Present Value/Internal Rate of Return
Not stated.

Value
The project is estimated at R11.01-billion.

Duration
Steady-state production is expected in the first quarter of 2020.

Latest Developments
One year after scaling back expansion plans for Styldrift I, RBPlat is considering the next phase of its two-phased ramp-up, which will bring it to a 150 000 t/m “sweet spot” over the next two-and-a-half years.

The company believes that the industry is now progressing from the “zone of uncertainty” into the “zone of progression”.

RBPlat materially reduced construction activities and the related capital expenditure (capex) on the Styldrift I project in August 2015 amid a sustained depression in the platinum group metals (PGMs) market.

The average rand basket price at the time was about R16 200/oz.

Following an increase in the rand basket price to R17 500/oz, RBPlat committed to R1-billion capex at Styldrift I for the 2016 year to facilitate a production rate of up to 50 000 t/m of on-reef development.

During the three months to September 30, steady progress was made with mining and construction activities, with RBPlat maintaining its revised construction schedule for the start of ramp-up-related works in the first quarter of 2017.

Now, with the average rand basket price for the first nine months reaching about R19 000/oz, the company plans to ramp up the Styldrift project.

“The 150 000 t/m level represents a sweet spot in Styldrift I’s ramp-up profile towards 230 000 t/m as it secures the optimal level of Merensky production for the company without the necessity to incur, in the current PGM environment, the significant expenditure that would be required for a further processing plant and infrastructure development to process production above this level,” the company has explained in an update to shareholders.

RBPlat’s attributable share of the capex for this next phase of the development is about R3.2-billion of a total estimated R4.75-billion.

Capex for the third quarter to September 30 reached R235.5-million, bringing the total project capex to date to R6.09-billion.

Key Contracts and Suppliers
WorleyParsons (main project engineering, procurement and construction management contractor); Anglo Technical Division (mine shaft design); Mining & Engineering Technical Services, or Mets (services shaft headgears); Shaft Sinkers (main and services shafts and associated works until January 2015, when RBPlat terminated its contract); Louwill Engineering (main and services shafts headgears and winder house structural manufacturing and erection); FLSmidth Minerals (main shaft personnel and material winder mechanical portion); Actom – formerly Alstom Industry (main shaft personnel-and-material winder – electrical portion); Coilmech (service winder – mechanical and electrical portions); Stefanutti Stocks Civils Wramatshe joint venture (civils Phase 2 contract – main bulk surface civils); Sarens (cranes); and Sandvik Mining (underground production trackless equipment).

On Budget and on Time?
The project has been deferred by 12 months. Project expenditure for the year ended December 31, 2015, was R1.66-billion, which brought the current cumulative expenditure on the project to R5.48-million.

Contact Details for Project Information
RBPlat executive: corporate affairs Mpueleng Pooe, tel +27 10 590 4515 or email mpueleng@bafokengplatinum.co.za; or investor relations manager Lindiwe Montshiwagae, tel +27 10 590 4510 or email lindiwe@bafokengplatinum.co.za.
WorleyParsons, tel +27 11 218 3000.
Mets, tel +61 8 9421 9000 or fax +61 8 9325 8311.
Louwill Engineering, tel +27 11 818 5186, fax +27 11 818 5185 or email mail@louwill.co.za.
FLSmidth Minerals, tel +45 36 18 10 00, fax +45 36 44 11 46 or email info@flsmidth.com.
Actom, tel +27 11 820 5111 or fax +27 11 820 5100.
Coilmech, tel +27 11 452 4063, fax +27 11 452 6104 or email info@coilmech.co.za.
Stefanutti Stocks, tel +27 11 571 4300, fax +27 11 571 4370 or email holdings@stefstocks.com.
Sarens, tel +27 11 861 3800, fax +27 11 861 3899 or email info@sarenssa.co.za.
Sandvik Mining EMEA business development manager Bjorn Gohre, tel +27 11 570 9676.