Johannesburg - Royal Bafokeng Platinum has swung into a loss, reporting headline earnings down 152.1% to negative 60.4c in the six months to June.
The black-owned RBPlat says two-thirds of this loss is attributable to the reduced average rand basket price (including revaluation of the pipeline) of R18 062/Pt oz from R21 148/Pt oz in the comparative period last year. The price paid for platinum has been sliding in recent weeks and is now at a multi-year low.
RBPlat also noted the first half of the year have proved to be the most challenging since RBPlat took operational control of the Bafokeng Rasimone Platinum Mine joint venture in the North West in January 2010.
“Our safety and operational performances, which were below expectations, contributed to lower production volumes and ounce output, against the backdrop of significant softening in commodity prices,” it said in a statement to shareholders.
The miner noted it suffered two fatal accidents during the period, one at BRPM North and one at its Styldrift project. Styldrift, also in the North West, is currently under construction.
RBPlat, owned by the wealthy Bafokeng nation in Phokeng, in the North West, adds it is targeting maintaining a healthy balance sheet during the depressed cycle and, as such, will materially reduce construction activities at Styldrift.
“It is not deemed appropriate to ramp up these high quality Merensky ounces into a currently depressed market at prevailing market prices, and neither is it deemed prudent to burden the balance sheet by raising further funding with its related excessively restrictive and/or dilutive terms and conditions that would apply in the current environment,” it says.
RBPlat adds it will reduce activities at Styldrift to the point that capex can be serviced via excess cash flows from BRPM as well as from revenue generated from on-reef development at Styldrift. So far, Styldrift is 55.8% complete, which is 0.9% behind RBPlat’s targets, and R4.8 billion has been spent on the project, R980 million of which was expended in the first half of the year.
In addition, the miner will be reducing its pull on Eskom by restricting metallurgical operations, especially crushing, which will allow underground operations to carry on without interruption. So far, this has been effective in managing stage 1 and 2 load shedding, although stage 3 curtailments impacted on production, it says.
“The indirect impact of the Eskom curtailments include reduced recovery, increased
maintenance and repairs due to unscheduled stopping and starting of the BRPM concentrator plant and other mine equipment designed to run continuously.”
Delivered tons for the reporting period ended 1.6% higher compared to the first half of 2014, although its production output was 8.8% lower due to operational constraints. It says its full-year output will be towards the bottom end of its target.
The company’s share price closed yesterday at R35.95.
IOL