ROYAL Bafokeng Platinum’s (RBPlat’s) operational difficulties have worsened with the company saying in a third quarter update it would undershoot platinum group metal (PGM) production guidance and costs would be higher than budgeted as a consequence.
It blamed the performance on Eskom-related power cuts, inflation and the impact on employee morale of corporate uncertainty which had affected safety standards. One miner was fatally injured in a trackless mobile machinery incident last month at Styldrift, the firm’s newly commissioned mine.
All in all, PGM production for the 2022 financial year would be between 455,000 to 470,000 ounces which compares to guidance of 485,000 to 505,000 oz. Total operational unit costs would be R19,500 to R20,500 per 4E oz compared to R18,500 to R19,000/4E oz.
Steve Phiri, CEO of RBPlat, told Miningmx in August that the competition between Impala Platinum and Northam Platinum for control of RBPlat “brings instability and consternation among workers”.
He may as well have also been speaking for himself. Phiri wanted to step down from his executive duties this year before agreeing to stay on after it became clear Implats’ takeover offer would be complicated by Northam which built a 34.5% stake in his firm. RBPlat’s COO Ian Carr also agreed to stay on after first intending to resign.
The fatality had a ripple effect on production, said RBPlat. It resulted in a work stoppage at Styldrift with the loss of FULCO (round-the-clock) production shifts for September. As per the regulatory Government Section 54 stoppage, a collison avoidance system upgrade had to be installed at Styldrift. It meant lower hoisting and production.
The company’s older Bafokeng Rasimone Platinum Mine performed satisfactorily during the quarter, the company said.
RBPlat also commented on the current operating environment saying that a combination of “high inflationary pressures due to global supply chain disruptions and market volatility stemming from the geopolitical instability caused by the Russia/Ukraine conflict, the longer-term impact of the Covid-19 pandemic and unreliable power supply” hit operations.
In August, Phiri expressed doubt about the prospect of a possible joint venture between Northam and Implats, one possible outcome of the rivalry between the firms.
“More often than not … they end up fighting one another, not making decisions that are important for the business. It’s always better with one owner as decisions are taken quickly and effectively,” he said. “It depends on the personalities. If you have one objective to bring this to fruition and a single purpose of making profits, and you don’t keep bickering over egos, then it will work,” he added.
Northam is currently having its case heard at the Competition Tribunal in which it’s being argued Implats’ successful takeover of RBPlat would be anti-competitive. The second and final installment of hearings is scheduled for the end of the month.
In the meantime, Implats has edged up its stake in RBPlat to around 41% with a 42% stake expected to give it full control. The long-stop date for its general offer for RBPlat shares has been extended to November 22.