RBPlat faces 25% wage hike after posting a hefty R164 million net loss
JOHANNESBURG – Royal Bafokeng Platinum (RBPlat), which posted a hefty R164 million net loss in the six months to June on teething problems at its Styldrift mine, is facing a 25 percent wage hike demand from the National Union of Mineworkers (NUM).
RBPlat chief executive Steve Phiri said wage talks had begun last week. “We are hoping the wage negotiation will yield positive results,” Phiri said.
Geoffrey Moatshe, the NUM’s regional chairperson, said the union would demand a 25 percent increase in wages across the board at a meeting with the company today as well as an R8 000 monthly housing allowance.
“We want the company to do away with the living out allowance, because it has resulted in the mushrooming of shanty towns,” said Moatshe, adding the company would negotiate responsibly.
Close to 60 percent of RBPlat’s costs are people.
JSE-listed RBPlat said earlier yesterday that its losses had widened to 70.8 cents a share up from 12.4c a share from the corresponding period last year, when the platinum industry was raking in bumper profits from the record rhodium and palladium prices.
The company said the high cash costs and increasing levels of depreciation due to the Styldrift ramp-up, high borrowing costs in 2019 and interest charges relating to the deferred Rustenburg platinum mine consideration were also major contributors to the loss.
The slower-than-planned output at Styldrift resulted in the company cutting the production target for the year to 3.9 million to 4 million tons from a previous estimate of 4 million to 4.3 million tons.
Styldrift, which produced commercially for the first time at the end of the fourth quarter of 2018, failed to live up to expectations, following a number of problems, including the termination of a mining contractor and difficulty in recruiting mining and engineering skills.
Phiri said despite the setbacks, Styldift would achieve steady-state production of 230 000 tons a month during the third quarter of 2020.
“Notwithstanding the slower-than-planned performance during the first six months, ongoing improvements in all key operating metrics are being realised. We remain confident that Styldrift will achieve its promised operational and cost-benefit commitments at steady state,” said Phiri.
Capital expenditure on Styldrift amounted to R536 million in the period, bringing total capital expenditure for the project to date to R12.34 billion.
The company said the addition of Styldrift revenue and an improved market environment saw a 90.6 percent jump in revenue to R3.1bn compared to R1.6bn in the 2018 comparative period. With the ramp-up of Styldrift, 4E and platinum production ounces increased by 21.1 and 21.3 percent, respectively.
Earnings before interest, taxation, depreciation and amortisation increased 136.2 percent to R525.6m from R222.5m in 2018.
Despite the decline in the company’s overall gross profit to R48.9m, the Bafokeng Rasimone Platinum Mine (BRPM) mines both in the North West achieved 140.3 percent growth in gross profit to R356.3m.
Recently appointed chief financial officer, Hanré Rossouw, said Styldrift had experienced growing pains.