SBPM headed for platinum success

INVESTMENT

SBPM headed for PLATINUM SUCCESS

Richard Shaft is a key production area at SBPM In 2018, Siyanda Resources, together with Bakgatla-Ba-Kgafela, became joint owners of Siyanda Bakgatla Platinum Mine (SBPM) after acquiring the mine from Anglo American Platinum. With over three years under new ownership, SBPM is doing well despite experiencing its fair share of challenges.

SBPM mine covers several production areas and two processing plants. These include Spud Shaft, Richard Shaft and Declines. The processing plants are Mortimer and Ivan Concentrator. Within four months after the takeover, the Decline shaft was reopened.

Increased production and strong financials

When new management took over in 2018, the mine was producing an average of 170 kt (kilotonnes) per month and just breaking even. The figure increased to 180 kt per month at the beginning of 2019, when the basket price per ounce of PGMs (platinum group metals) was approximately R12 000.

“The team’s mission was firstly, to enable a stable business and labour environment. Thereafter our leadership and management teams aimed to meet the operational objective to increase the life of mine

and in turn generate extended shareholder value,” says Francois Uys, CEO. The company managed to close FY 2019/20 by producing 308 536 ounces of 4E (platinum, palladium, rhodium, gold), including 188 904 ounces of platinum, off a resource base of three million milled tonnes. “We managed our costs well and the PGM basket price was good due to our high proportional palladium split. As a result, our profit margins became healthy,” Uys explains.

“We started the 2020/21 financial year facing a PGM basket price per ounce of over R45 000 and a potential mining output of 250 kt per month, as well as a looming Covid pandemic,” Uys says.

Dealing with the global pandemic

The Covid-19 pandemic was unexpected and ultimately had a far-reaching impact on many industries and economies across the word. “We all watched as countries around the world started to shut down their economies in efforts to minimise the human impact of the pandemic. When the first case in South Africa was announced at the beginning of March 2020, we were not complacent and reacted proactively,” Uys says.

With a workforce of more than 5 200 people, SBPM is a labour-intensive business, and saving lives and livelihoods required decisive action from the company. “We established a multidisciplinary planning team two weeks before President Cyril Ramaphosa announced the first lockdown to limit the rapid spread of the Covid-19 pandemic. The necessary maintenance was done during lockdown; during start-up, we were ready for the challenge and started health screening of employees in preparation for start-up at reduced capacity. We eventually started mining and processing activities in late April 2020 at 50% employment capacity under Alert Level 4. We did not have 100% of our employees until late October 2020. Some of them were locked outside the country’s borders or were under quarantine/isolation.”

Despite the challenges of not having a full complement of production teams for a few months, supply-chain-related issues, as well strict social distancing, screening and testing protocols, SBPM went beyond merely maintaining critical activities – ramping up production by late June 2020 and gradually increasing labour while strictly observing all Covid-19 protocols.

Some of the planned capital projects had to be delayed while the company was dealing with the reality of workforce shortages, as well as maintaining strict access control. In the short term, productivity and efficiency were impacted, but this was an acceptable risk, and the impacts ultimately negligible.

HSE and rewards of resilience

The drive to improve workforce health, safety and wellness is an important journey. The mining work environment can be highly hazardous and analyses of fatalities and serious injuries across the mining industry show that most incidents occur when somebody knowingly fails to comply with safety procedures or rules put in place to prevent injury. “Production and innovation are

Francois Uys is the CEO at Siyanda Bakgatla Platinum Mine

We emerged a stronger, more resilient business from the lockdown year. The Covid-19 pandemic has taught us to become more adaptive to unforeseen threats.”

INVESTMENT

dependent on us working together to change this mindset.” Uys believes that traditional linear enforcement and disciplinary processes, while essential, are not the only or most effective controls. He feels that leaders ought to take more responsibility in driving behaviour change. Despite the negative impacts “We need to set the due to the initial shutdown, compliance example and restricted workforce numbers and strict Covid-19 procedures, we have to incentivise the correct behaviour,” he insists. “Despite the negative managed to make most of our impacts due to the initial operational performance and shutdown, restricted efficiency targets.” workforce numbers and strict Covid-19 procedures, we managed to make most of our operational performance and efficiency targets,” Uys says. He further adds that, even with the largely Covid-19driven challenges experienced, the PGM basket price resulted in higher earnings than expected. “Despite the 7% decrease in total tonnes milled, we ended the 2020/21 financial year with a respectable R5.306 billion EBITDA.”

Other milestones achieved by SBPM include: • four million fatality-free shifts in 2019 • sustainable stakeholder relationships with the local communities and government • healthy relationship with the labour unions • empowerment of employees through employee share scheme. “We emerged a stronger, more resilient business from the lockdown year. The Covid-19 pandemic has taught us to become more adaptive to unforeseen threats.”

Exciting opportunities on the horizon

The past two years have been undoubtedly challenging; however, they have also presented some great opportunities for SBPM. According to Uys, the local business forum has put a lot of pressure on the business to create more opportunities. Effective controls have been put in place to manage the procurement opportunity management process better. In FY 2021/22, SBPM will advertise through a dedicated tender system where local communities will be invited to tender. “Ethically, we need to make sure that preferential procurement processes are always adhered to.”

There are also plans to invest heavily into the future development of the mine to enable a longterm trajectory of sustainable growth. “To extend the life of mine, we continue to build capacity by investing in development. Our earnings are causally related to production. We have planned for conservative increases for the next financial year due to anticipated Covid-19-related disruptions. We also anticipate commodity pricing to remain buoyant,” Uys concludes.

For more information, contact SBPM:

Telephone: +27 (0)11 832 2453 – Ext 109 Website: www.siyandaplatinum.com

Siyanda Bakgatla Platinum Mine Siyanda Bakgatla Platinum Mine (Pty) Ltd