ANGLO Platinum (Amplats) had received the thumbs up from its board to pump R3.9 billion into the life extension of its Mototolo mine, the group said on Friday amid strong platinum group metals (PGM) fundamentals.
The project, which involves sinking a new shaft, will expand Mototolo’s life beyond 30 years, with production forecast to be 250 000 PGM ounces per year.
Amplats, one of the world’s top platinum suppliers, said the capital investment would be deployed over six years, with the majority of capital invested between 2022 and 2024.
“The financial returns of the project are expected to be robust, with an internal rate of return of over 25 percent and payback of around six years from first production expected in late 2023, based on consensus pricing,” said the group.
The project will see the extension of the Mototolo mine into the adjacent Der Brochen mine and will provide depleted ounces. “The Der Brochen project is one example of the high-quality, low-cost expansion options we have available in our existing portfolio of assets that will allow us to continue delivering industry-leading returns to shareholders,” chief executive Natascha Viljoen said.
Amplats said it continued to focus on plans to expand the Mogalakwena mine, its most profitable operation, as part of bringing additional ounces into the market. Amplats is focused on five work streams in developing Mogalakwena, including the construction of a third concentrator.
The group said on Friday the group had delayed making a decision on whether to proceed with the third concentrator. In February it had said the decision would be made by year end.
“The delay in the decision does not impact the timeline of the project,” said Viljoen.
“She said the work streams did not need to go in a sequence and the biggest prerequisite was the way the company dealt with communities because it is time sensitive.
In terms of outlook, the group said due to the strong refined production performance in 2021, refined production guidance for 2022 had been revised to between 4.2 million to 4.6 million PGM ounces.
The first full rebuild of the Polokwane smelter was scheduled for the second half of 2022. It expects costs of between R13 800 to R14 500 a PGM ounce. The share price closed 2.77 percent lower at R1 798.47 on Friday.
BUSINESS REPORT ONLINE