The PGE include platinum, palladium, gold, rhodium, osmium, rhenium, iridium and ruthenium. Platinum, palladium and rhodium are produced in any substantial quantities. South Africa accounts for 50% of the worlds platinum and palladium production and holds 55% of global reserves. The industry accounted for 33% of dollar export revenue in 2003 with 148,348 kg of platinum being produced. Unlike the gold industry, the platinum markets are relatively low risk, with a constant demand coming from Japan and the USA. South Africa’s platinum mines produced 16,816 kg rhodium and 70,946 kg palladium in 2003 and provided jobs for approximately 90 000 people.
South Africa’s PGE reserves are located in one of the largest layered mafic intrusions in the world, the Bushveld Igneous Complex (BIC). PGE’s are recovered from the tabular Merensky Reef that is present along the entire strike length of the Eastern parts of the BIC. The UG2 and Platreef (present only along the northern limb) also contain economic quantities of PGE’s. Anglo American Platinum (Anglo Platinum) is the world’s largest platinum and palladium producer, operating 6 mining operations in the BIC. Other major producers are Impala Platinum (Implats), Lonmin Platinum (Lonplats), Northam Platinum and Aquarius Platinum. New developments include: Aquarius Platinum’s Marikana Mine and Winaarshoek Mine and re opening of several older operations such as the Crocodile River mine and Kennedy’s Vale mines by Implats. Southern Era are developing the mothballed Messina mine in light of the elevated PGE prices.
Following the spike in PGE prices, exlploration efforts have intensified across the Bushveld Complex. In particular, the Northern Limb and Eastern Limbs of the BIC have been receiving a lot of attention from junior exploration companies. In the Northern Limb, most juniors have obtained land holding along strike from the opencast Anglo Platinum mine at Potgietersrus. Companies such as Cluff Mining, Anooraq, Thabex, Pan Palladium Ltd and African Minerals have advanced drilling programs in these areas. In the Eastern Bushveld, the UG2 has been targetted as a source of PGM’s, in particular palladium, where it appear more prevalent.
Anglo Platinum, in which Anglo American has a 45% interest, has proven and probable ore reserves totaling 1 400 Mt grading at an average of 5.1 g/t (PGE’s). This provides Anglo Platinum with at least 100 years ore reserves. Anglo Platinums’ production in 2003 was estimated at 2.03 Moz of platinum, 1.19 Moz palladium. Other metals such as nickel, copper and gold are also produced as by products. Anglo Platinum currently has six mining operations operated by Rustenburg Platinum Mines (RPM), which includes RPM Bafokeng – Rasimone, RPM Union, RPM Amandelbult and RPM Rustenburg. These mines are situated on the western limb of the BIC, whilst Potgietersrust Platinums in the northern or central limb, and Lebowa Platinum Mines on the Eastern limb of the BIC. All of the operations are to be amalgamated into a single company, Anglo Platinum.
Potgietersrus Platinum is currently the only open pit operation, exploiting the Platreef. This mine is one of the lowest cost platinum producers in the world. Development of the Bafokeng – Rasimone mine near Rustenburg and expansion of the open pit operation at Potgietersrus platinum near Potgietersrus will see Anglo Platinum platinum production exceeding 2.2 Moz per year. Anglo Platinum intends increasing overall production to 3.5 Moz by 2006.
In order to achieve this, Anglo Platinum has embarked on expansion projects at RPM Bafokeng Rasimone (annual production of 250 000 oz – completion in 2002), Modikwa (previously Maandagshoek with annual production of 162 000 oz – completion late 2004), RPM Amandelbult/MiddelPunt Hill (annual production of 107 000 oz – completion 2000). At RPM, the new Waterval project will add an additional 395 000 oz/year. This expansion should be achieved in late 2001. At the Union Section of Rustenburg, a $55 million upgrade should see an annual increase of 94 000 oz. These projects collectively account for 1.3 Moz of extra production.
In order to facilitate this planned increase in PGM production, Anglo Platinum is to embark on the construction of a new smelter, which is to be constructed in the Limpopo Province. Anglo Platinum’s only smelter is located near Rustenburg in the North West Province. The new smelter will probably be fed from Anglo’s developing Modikwa Project as well as its Midellpunt Hill expansion. The development of the Modikwa Platinum Mine is going ahead with empowerment partners African Rainbow Minerals that has an equal share in the development.
Anglo and rival PGM miner Lonmin are to develop the Pandora deposit, located close to Brits on the Western Bushveld. Pandora will produce an additional 230 000 oz platinum and 110 000 oz palladium per year at full production. Capital costs for the joint venture are estimated at $175 million and the joint venture partners intend introducing a black empowerment company, most likely to be Mvelaphanda Platinum or ARM. In its final expansion announcement, Anglo platinum announced the proposed development of the Twickenham deposit, located along the Eastern rim of the Bushveld. The mine is anticipated to produce 160 000 oz Pt per year.
Impala Platinum (Implats)
Impala is South Africa’s second largest producer. Implats also has a 27% share in LonMin, South Africa’s other major producer, as well as interests in Aquarius Platinum, who operate the Kroondal mine near Rustenburg. Implats produced an estimated 1.04 Moz PGM in 2003, including 493 000oz palladium and 131 000 oz rhodium. Plans are underway to boost platinum production to 2 Moz by 2006. Impala has had several legal disputes with the local Bafokeng tribe that have laid claim to the mineral rights over which Impala are currently mining. A long-standing issue has been finally resolved, with the Bafokeng tribe being paid large royalties. Implats currently has two mines, the Bafokeng North and Wildebeesfontein South situated on the western limb of the BIC. The Merensky Reef and UG2 are exploited using underground methods.
Lonmin [LSE:LMI] is challenging its big South African rivals by speeding up its expansion plans. The world’s third-biggest producer of platinum group metals says it now intends to boost annual platinum production capacity from the present 670,000 ounces to 870,000 ounces.
Based on uncertainties regarding Russian palladium and platinum supplies and subsequent record prices for PGM’s, Impala are re opening the underground Crocodile River Mine. Crocodile River managed to produce 39 100 oz platinum concentrate in its first year of full operation in 2002, with full capacity expected to be reached by the end of 2003. The eventual target remains 50 000 oz platinum. The Kennedy Vale mine on the eastern limb could also be reopened, pending the platinum and palladium price. A feasibility study is to be completed in 2003 and a decision to go ahead with the development of Kennedy’s Vale will be based on resource and market evaluations, expected to be finalised by early 2004. Implats is also refining the matte produced from the new Kroondal Mine, operated by Aquarius Platinum. Mineral resources from the UG2 and Merensky Reefs at Implats’ operations have been estimated at containing a total of over 31 Moz of platinum.
Impala and Anglovaal Mining (Avmin) have successfully bid for the Dwarsrivier PGM property located upon the Eastern Limb of the Bushveld. The property (that hosts both PGM bearing Merensky and UG2 reefs) is anticipated to produce between 160 – 170 000 oz PGM per year over a 20 year life. Capital costs have been estimated at approximately $50 million. Avmin will operate the mine to be called Two Rivers. Avmin will have 55%, with Implats the remaining 45%. The property has significant expansion potential through the Kennedys Vale PGM deposit that borders on Dwarsrivier. Kennedys Vale is owned by Barplats in which Implats has a significant shareholding.
Implats have completed a feasibility study at its Marula (previously Winaarshoek) property, located on the Eastern Limb of the BIC, near the Atok mine operated by Anglo Platinum. Proven and probable reserves totaling 62.5 Mt grading at 5.54 g/t, containing 11 Moz PGE. At full production, Marula will produce over 200 000 oz platinum/year over a 30 year period. Production at Marula is expected to commence in 2004, reaching full capacity for Phase 1 of 103 000 oz/year in 2005. Empowerment company Mmakau Mining Ltd has been chosen by Impala as its primary black empowerment vehicle for the development of Marula. At present , Mmakau is earning a 10% interest in Marula.
Lonmin Platinum (Lonplats)
Lonplats is the smallest of the three major platinum producers, but also one of the lowest cost producers. Lonplats produced 650 000 oz platinum in 2000, representing 17% of the total produced in South Africa. Expansion plans at Lonmin’s facilities should see production boosted to 870 000 oz Platinum by 2003. Lonplats operates three adjoining mining operations (Western Platinum, Karee Mine and Eastern Platinum). Implats currently owns 27% of Lonplats. The European Commission blocked an anticipated merger between the two companies. Implats has apparently offered its share in Lonplats for acquisition of the Karee Mine.
Lonplats provides important income to Lonmin Plc (which owns 72.9% of Lonplats), contributing nearly 20% of the company’s earnings from platinum operations. Lonmin has entered into a joint venture with Anglo Platinum to develop the Pandora deposit that will produce 230 000 oz platinum and 110 000 oz palladium per year. Lonmin also intend entering PGM production in Australia through its joint venture with Australian junior Helix Resources over the Munni Munni deposit that has the potential to become Australia’s first PGM mine.
Aquarius Platinum is a majority shareholder of Kroondal Platinum Mines Ltd in South Africa, which is now ramping up to full production. Annual output is expected to reach 100 000 oz platinum, 54 000 oz palladium and 17 000 oz rhodium. Aquarius also owns 100% of the Marikana platinum project, which is situated only 8 km from Kroondal. Here construction has begun , following the completion of a bankable feasibility study. At full production in 2004, Marikana is expected to produce 155 000 oz PGMs per annum and employing 500 people. The Kroondal Platinum Project was developed and completed two months ahead of schedule and 12% under budget. Aquarius has an agreement with Implats whereby all ore concentrates will be sent to Implats’ for refining. Chromite is produced from the flotation tailing and a portion of the production is to be sold to Chrome Resources Ltd under an existing agreement.
Following the completion of the Marikana project, Aquarius will shift their focus to their 75% owned Everest South project, that has outlined a total resource of 51 Mt grading at 4.7g/t PGM for a total of 7.7 Moz PGM.
Southern Era, known for its development of the Klipspringer and Marsfontein diamond mines, has entered the platinum scene by purchasing Implats’ 54% share in the mothballed Messina Platinum mine for $10.5 million. The Messina Project is wholly owned by Messina Limited, a South African corporation in which Southern Era has a 70.4% ownership interest. Implats sale of the mine could be seen in the light of its poor relations with the Bafokeng tribe, which lays claim to the Messina mineral rights. Southern Era apparently have a better relationship. The Messina platinum mine is located on the Eastern limb of the BIC, close to Southern Era’s diamond mining operation. Southern Era has rights to four separate project areas – Voorspoed, Doornvlei, Zebediela and Kafferskraal East. The Voorspoed deposit is currently being evaluated and is anticipated to produce 159 000 oz PGE, consisting of 44% platinum, 34% palladium, 5% rhodium, 11% ruthenium, 3% iridium and 3% gold. Messina is currently undertaking bulk metallurgical testing. Financing, estimated at $64 million has been successfully raised to fast track the project. Fast tracking of Voorspoed has resulted in the production of Messina’s first concentrate in the second quarter of 2001. Southern Era are now embarking on Phase 2 of its development of Messian that includes a feasibility study of the Doornvlei Section. The Doornvlei feasibility study anticipates an average production rate of 173 000 oz 5PGM +Au at an operating cost of US$107/oz. Capital expenditure has been estimated at US$84.7 million.
Southern Era have also increased its landholdings in the Eastern Bushveld, where it has acquired a 100% in Millenium Platinum Group Metals that have ground to the north of the Steelpoort Valley. Here an inferred resource of 10.03 Mt grading 4.46 g/t (5PGE+Au) has been estimated on the eastern portion of the project.
The Northam Platinum mine is located north of Anglo Platinum’s Amandelbult section on the western limb of the Bushveld Complex has seen an improvement in fortune via new management as well as rising PGM prices. The mine produced 280 516 oz 3PGM +Au in 2001 and intends increasing production via its UG2 reef resources. Northam Platinum is one of South Africa’s first platinum companies that has the major backing of a black empowerment mining group, Mvelaphanda Platinum, a subsidiary of Mvelaphanda Holdings. Mvelaphanda intend using Northam as a vehicle to enter the lucrativre PGM industry in South Africa.
The sheer size of the Bushveld Complex in South Africa has made a favourable target for several junior exploration companies, primarily from Canada and Australia. Most exploration is taking place along the poorly explored Northern and Eastern Limbs of the Complex.
Cluff Mining Plc has positioned itself well through the acquisition of Sperrylite Resources, a local company that has access to four identified PGM prospects located within the Eastern Bushveld. Cluff has joint ventures with Anglo Platinum and Impala over two prospects, Sheba Ridge and Blue Ridge, respectively. Cluff are focusing on the Blue Ridge Prospect that has an indicated resource estimated at containing 1.7 Moz PGM. At Sheba Ridge, Anglo Platinum has an option to earn a 87.5% interest based on the completion odf a bankable feasibility study
South Africa’s third largest gold producer, Harmony have delineated a potential PGM resource just north of its existing gold mining operations (Kalgold) in the North West Province. Initial drilling at the Stella PGM Project has identified an initial resource of 3.4 Moz at an average grade of 1.6 g/t (Pt, Pd and Au).
Australian junior Pan Palladium have an agreement with Impala over the completion of a bankable feasibility study over Pan Palladium’s two prospects located in the Northern Limb of the BIC.
Canadian Anooraq Resources have secured significant ground immediately to the north of Anglo Platinum’s open cast Potgietersrus Mine located in the Northern Limb of the BIC. Anooraq has also entered into a joint venture with African Minerals Ltd over the Rietfontein property, whereby African Minerals can earn up to 50% I the Rietfontein Project. African Minerals Ltd is an affiliate of Ivanhoe Capital Corporation.
Local exploration outfit Thabex Exploration (through subsidiary Platinexco) have begun drilling on their property, located south of Anglo Platinum’s Potgietersrus mine.
Anglo American Platinum Corporation Ltd
1. Rustenburg Platinum Mines (RPM) includes the RPM Bafokeng – Rasimone, RPM Union, RPM Amandelbult and RPM Rustenburg Mines. They are all located on the Western Limb of the Bushveld Complex in the North West Province.
2. Potgietersrus Platinum (PPRust) operates the only opencast operation located on the Northern Limb, near the town of Potgietersrus.
3. Lebowa Platinum operates the Atok Mine situated on the Eastern limb of the BIC.
Anglo American plc
Aquarius Platinum Ltd
Impala Platinum Holdings Ltd
Kroondal Platinum Mines Ltd
Lonmin PLC is a mineral resources group, which specializes in the mining of platinum, gold and coal. The Group operates three platinum mines, which include metallurgical and refining operations in South Africa. Lonmin’s gold interests stem from a 32% interest in the Ashanti Goldfields Company in Ghana.
Northam Platinum Ltd
Northam Platinum operates the Northam platinum mine, located on the Western Limb of the Bushveld Complex.
Southern Platinum Corp
Southern Era have a 70.1% interest in the Messina Platinum mine, located in the Northern Province near Potgietersrus.