We identified the following key issues that we need to address in our quest to achieve operational excellence:
Our safety strategy has been implemented and we are busy embedding the culture of safety first in our operations. While we have not yet achieved zero harm we are very pleased with the progress we have made with our safety performance.
When RBPlat took over the management and control of Bafokeng Rasimone Platinum Mine (BRPM) we needed a new approach that would allow us to achieve operational excellence as a stand-alone business. We needed to establish a permanent and sustainable footprint of doing the right things for the right reasons. We hired change management specialists, Alexander Proudfoot, who have extensive experience in the mining industry, to undertake a business review of BRPM. Based on this review we implemented Project Kgolo to reduce costs by 7.5% and increase production by 7.5%. BRPM’s Management Committee and RBPlat’s Executive Committee approved Project Kgolo in July 2010. Four main work streams were identified for the project: mining, engineering, central stores and the concentrator. BRPM selected a dynamic team of experienced specialists from BRPM to work with the Alexander Proudfoot team and develop the skills necessary to continue with the project once the Alexander Proudfoot team completed its commitment at BRPM. The project began with a quick win cost reduction exercise.
We are focused on improving productivity and reducing costs across the business operations and at our corporate office. We aim to develop and implement an effective supply chain management (SCM) process and enhance the capacity of the newly established SCM Department. Effective activity based accounting at shaft level will also contribute towards managing costs.
Project Kgolo, implemented in July 2012 after a review by management specialists Alexander Proudfoot, identified the need to improve employee engagement. In particular, it identified the need to reduce the gap between senior management and lower level miners and to ensure all employees understood the goals and objectives of the project by improving communication.
We realise the importance of continually engaging with our workforce (employees and contractors) to achieve transparency and mutual understanding of issues. It is essential to maintain healthy relationships with our workforce and communities through regular engagement and community forums in order to manage expectations and understand changing needs. Supporting communication material in the form of regular newsletters, posters, messages on notice boards, a mine mascot that delivered key production and safety messages are available.
In addition to the current replacement and expansion projects, several additional studies have been commissioned to ensure the long-term production sustainability of the BRPM joint venture. R143 million has been budgeted for this purpose over the next five years.
The five major projects for 2012 were:
BRPM Phase II replacement project commenced in 2004 with the North shaft completed in 2011 and the South shaft completed in September 2012, both successfully and on schedule. The project resulted in New Merensky production levels from 6 to 10 level at both North and South shafts and a continued bias towards Merensky Reef production at BRPM. The total cost of the project was R2.3 billion, under budget by R110 million.
BRPM Phase III North shaft replacement project commenced in November 2010 with completion planned for the third quarter of 2017. It will result in:
This seven-year replacement project, extending the decline system and associated infrastructure from 10 to 15 level at North shaft, is progressing ahead of schedule and under budget. The actual project expenditure to date is R410 million.
The total development for the project to date is 544 metres ahead of schedule, with 3,987m completed against a plan of 3,443m. During the year the first level of Phase III (11 level) was handed over to operations for lateral development. The overall project is presently 40% complete.
The North shaft chairlift project allows for the development and installation of a chairlift from surface to 5 level. This will replace the use of the personnel-riding belt to transport people. The project commenced in 2012 and is 35% complete against a plan of 19% and equates to being 592m ahead on the development schedule. The capital expenditure, to date, amounts to R28.44 million, with a final estimated cost of R136 million.
Styldrift concentrator plant pre-feasibility study was completed during the first half of 2012. A concentrator plant will be constructed adjacent to the mine to be commissioned as the mine ramps up to full production. Geomet testwork is currently being conducted to establish the optimal comminution circuit configuration and confirm the proposed flotation circuit design. We commenced the feasibility study in mid-2012, which will be concluded by the third quarter of 2013. Construction of the concentrator will need to begin in the second half of 2014 for completion by the second half of 2016.
Styldrift II concept study was completed with the pre-feasibility study expected to be completed by end of 2014.
Our greenfield project on the Styldrift farm, contiguous to the Boschkoppie farm, located on one of the last known blocks of shallow Merensky Reef deposits, involves a new mine development with twin shaft systems to be sunk to a depth of 740 metres. Styldrift’s shallow high quality Merensky ore body gives it a number of advantages which we believe will earn it a premium when it goes into production and ensure the growth and profitability of our business in the long term.
Expansion capital expenditure at Styldrift increased by R8 million to R646 million, in line with the construction schedule. The project remained well below budget with a forecasted saving at completion of R323 million. Styldrift remains on schedule to commence production in 2015 and to ramp up to full production in 2018. We expect the overall joint venture head grade to benefit from the Styldrift Merensky contribution from 2016 and to increase to between 4.25g/t (4E) and 4.30g/t (4E).
The Styldrift II project, an exploration project with organic growth potential, has a resource area covering approximately 24 million square metres varying in depth between 900 and 1,500 metres, at an average dip of 90 and accounts for 40% of the total BRPM JV resource. Unique to the project area is the fact that the Merensky resource is exclusively underlain by the Swartklip Facies, which is generally characterised by improved lateral continuity of grade and consistency in the mineralised envelope width, when compared to the Rustenburg Facies found on BRPM and Styldrift I.
During 2012 we completed the concept study initiated in 2011 and updated the geological model with the exploration drilling data accumulated from the 2011 exploration drilling programme.
Updating the geological model has resulted in an improvement in our overall resource confidence levels to the extent that they can support both pre-feasibility and feasibility study work. It also confirmed the lateral grade continuity and consistency of the mineralised envelope.
The outcome of the concept study was presented to the RBPlat Executive Committee and approval was granted to proceed with the pre-feasibility study which we expect to take approximately 18 months and we anticipate completing during the first half of 2014.
To further enhance our understanding of the ore body in the project we are planning to drill an additional 27,000 metres in 2013.
RBPlat's directors endorse the King Code of Governance Principles of South Africa (King III) and accept full responsibility for the application of the principles necessary to ensure that effective corporate governance is practiced consistently throughout the Company. More