Royal Bafokeng platinum mine.Photo Supplied

Johannesburg - Black-owned Royal Bafokeng Platinum (RBPlats) slid yesterday on the JSE, along with other commodity related stocks as China posted economic data that signaled slowing demand from the world’s second biggest economy. The share drop overshadowed RBPlats higher production figures for the September quarter.

RBPlats fell 4.68 percent yesterday to R29.55, while Northam Platinum dropped by 3.40 percent to R32.36 and Lonmin fell 13.42 percent to R5.87.

For the quarter to September, RBPlats yesterday reported a 3 percent increase in platinum, palladium, rhodium and gold ounces-in-concentrate to 82 900 ounces in the period under review from 80 400 ounces in the September quarter last year.

Seten Naidoo, a mining equity analyst at SBG Securities, said production was higher due to excess stocks from the first half of 2015 being processed in the quarter and added that it was a “good set of operational results”.

“One should not read too much into the share price decline on the day as platinum group metals prices traded weaker on the day and RBPlats traded largely in line with its peers. RBPlats is one of the preferred platinum stocks on the JSE, given the growth Styldrift mine has, its attractive position on the cost curve and enviable labour relations and black economic empowerment credentials,” he said.

Scaling down

However, total tons delivered to concentrators were 4 percent lower at 662 tons in the September quarter compared with 687 tons in the September quarter last year. The company said it was scaling down on construction related activities at the Styldrift I project.

To respond to falling global commodity prices and slumping demand, the company introduced austerity measures, including the reduction of non-critical expenditure and improving short-term cash flow, and cut 174 employees at its Bafokeng Rasimone platinum mine joint venture.

Capital expenditure for the quarter was R370 million, which is 40 percent higher than the same period in 2014, but is 32 percent lower than expenditure in the second quarter of 2015, RBPlats reported.

Cash operating costs for the quarter to September rose to R703m, 9.2 percent higher than the comparable quarter last year. The cost of producing a platinum ounce increased by 7.7 percent to R13 310, the company said.

The company said it would focus on enhancing the ability of Styldrift to ramp-up beyond 50 000 tons a month, including by developing a 642 level footwall development, decline and ore-pass installation.

The Styldrift I project had fallen behind schedule by six months over the last year, mainly due to constraints regarding the services shaft.