Strategy and business model

THE FOUR PILLARS OF OUR STRATEGY HAVE BEEN IN PLACE SINCE 2010.

Every year the Board and the Executive Committee review our strategy and the key material issues that need to be addressed if we are to achieve our strategic objectives.

We measure our achievements in terms of our four strategic pillars by annually setting key financial and non-financial performance indicators. We continually measure our performance against these indicators.

Our performance against our strategy

Strategic pillar 1:
Towards operational excellence

  • Achieve zero harm
  • Optimise volumes
  • Reduce costs
  • Labour stability
  • Meeting Mining Charter III commitments
  • Integrating sustainability throughout our operations

Strategic pillar 2:
Build flexibility to ensure sustainability

  • Maintaining our IMS panel ratio at BRPM
  • Achieve IMS panel ratio at Styldrift
  • Processing flexibility and capacity
  • Balance sheet flexibility

Strategic pillar 3:
Grow organically —
positioning RBPlat to compete over the long term

  • Complete Styldrift, a high-grade asset

Strategic pillar 4:
Pursue value enhancing opportunities

  • Royalty agreements
  • Gold streaming agreement
  • Mergers and acquisitions

 

  • Key
  • Achieved
  • Partially achieved
  • Not achieved

We use our business model to create economic value for all our stakeholders

Issues in our operating context that could impact our ability to create value now and in the future:

  • Uncertain global and local economic conditions
  • Basket price sensitivity to market forces and currency volatility
  • Rising costs
  • The effects of climate change
  • Expectations of the communities in which we operate
  • Challenges in the regulatory and policy environment
  • Global emissions legislation
  • Uncertainty regarding Eskom’s ability to meet our electricity requirements

Our high standards of corporate governance ensure we have:

  • effective control of our business
  • consider the impact on our stakeholders of our decisions
  • maintain our focus on entrenching an ethical culture and addressing the challenges we face as a business with regards to ethics, fraud and corruption

See Intellectual capital for more information

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  Financial

Our capital inputs

 

Strategic pillars and focus SDGs impacted

Our outputs

 

Our outcomes:
The value we created for our stakeholders

  • R883.5 million cash on hand generated by our operations
  • R1 715.9 million debt excluding R1.6 billion owing to Amplats for the acquisition of its 33% interest in the BRPM JV
  • R1 142.7 million in undrawn credit facilities
 
  • R1 027.6 million cash generated by operations
  • Average rand basket price of R28 743 per platinum ounce resulting in revenue of R7 491.9 million
  • R1 029.1 million raised via rights offer
  • Triple Flag gold streaming agreement resulting in post year-end upfront cash prepayment of US$145 million (equating to approximately R2.1 billion)
 
 
  • RBPlat was able to fund 68.1% of its capital requirements in 2019 (see Financial capital)
  • Proceeds from the Triple Flag upfront cash prepayment used to fully settle the amount of R1.851 billion outstanding as at 30 January 2020 on our purchase of Amplats' interest in the BRPM JV and optimise our balance sheet (see Financial capital)
  Manufactured

Our capital inputs

 

Strategic pillars and focus SDGs impacted

Our outputs

 

Our outcomes:
The value we created for our stakeholders

  • Competitive ore bodies at our BRPM and Styldrift mines made up 348Mt of shallow, long life Merensky and UG2 resources
  • Two efficient processing plants
  • Operational flexibility
 
  • Completion of outstanding infrastructure at Styldrift
  • Ramp-up of UG2 production at BRPM South shaft to 20ktpm
  • 12.5% increase in tonnes milled
 
 
  • RBPlat is ramping-up Styldrift, its organic growth project, to the 230ktpm milestone and
  • increasing UG2 production as PGM prices strengthen and
  • our average basket price has increased by 36.8% year-on-year
  Human

Our capital inputs

 

Strategic pillars and focus SDGs impacted

Our outputs

 

Our outcomes:
The value we created for our stakeholders

  • 9 508 employees
  • Transformed, skilled and stable workforce
  • Diverse and skilled Board and management
  • Commitment to our people’s development and well-being
  • Investment in safety leadership skills
 
  • Artisan skills requirements for Styldrift addressed
  • Styldrift training centre well-equipped to meet current and future artisan skills requirements
  • Second five-year wage agreement signed with enrolled employees
  • 38.1% improvement in SIFR and 23.2% in LTIFR year-on-year
 
 
  • While we experienced a challenging shortage of artisans at Styldrift during 2019 this has now been addressed (see Manufactured capital)
  • While, tragically, we had two fatalities in 2019, we were able to increase the safety, overall, of our employees; we also maintained labour stability
  Intellectual

Our capital inputs

 

Strategic pillars and focus SDGs impacted

Our outputs

 

Our outcomes:
The value we created for our stakeholders

  • Robust governance structures
  • Application of technology, use of machine learning and advanced data analytics to achieve increased efficiencies and effectiveness
 
  • Ongoing strengthening of governance structures, including ICT governance throughout RBPlat
  • Entrenched ethical culture
  • Increased understanding of how we can use technology and the learnings from data analytics to drive productivity efficiencies and reduce costs in our operations
 
 
  • We have been able to further entrench our governance principles and protect the integrity and reputation of our business through our ethics management model
  • RBPlat is well-placed to put in place a data integration strategy and start delivering on this strategy
  Social and relationship

Our capital inputs

 

Strategic pillars and focus SDGs impacted

Our outputs

 

Our outcomes:
The value we created for our stakeholders

  • Established community engagement structures
  • R63.2 million investment in our social and labour plan in 2018
  • Focus on building sustainable doorstep businesses
  • Access to home ownership for our employees
 
  • Strong community relationships
  • Substantial increase in learners writing maths and science for matric
  • 86.6% of our total discretionary procurement spent with HDSA businesses
  • 82.6% increase in our procurement from our doorstep HDSA businesses
  • R65.8 million invested in our SLP
  • 1 000 families have purchased homes in our home ownership scheme
 
 
  • Through our focus on engaging with our communities, investing in enterprise and supplier development and working to increase our discretionary procurement from our doorstep HDSA businesses, we are increasing the ability of our communities to become sustainable
  Natural

Our capital inputs

 

Strategic pillars and focus SDGs impacted

Our outputs

 

Our outcomes:
The value we created for our stakeholders

  • Good stewardship of our Mineral Resources and Mineral Reserves
  • B score for both CDP climate change and water disclosures, which exceeded the industry average
  • Improved water use efficiency
  • Decrease in GHG emission intensity
 
  • Increase in our Mineral Resources
  • Maintained B score for both CDP climate change and water disclosures, which exceeded the industry average
  • Increased use of water, energy and materials as a result of increase in production and inclusion of the Maseve concentrator
 
  RBPlat with its shallow high grade resources is well-positioned to take advantage of the strong PGM market

The trade-offs required to achieve value creation

Health and safety

The need to entrench safe behaviour, particularly in our leadership, has financial implications, but benefits the well-being of our people and our productivity through improved safety performance

   

Investment in skills development

In order to ensure we have the skills we need to create value we invested 7% of our payroll in the training and development of our employees and community members

       

Costs

Impact on operating costs

  • Recommencing UG2 mining at BRPM South shaft to increase UG2 production
  • Mobilisation of additional resources to ensure Styldrift 230ktpm ramp-up is achieved (see Manufactured capital)

Capital expenditure

  • Upgrade of Maseve concentrator and expansion of current tailings storage facilities
   

Stakeholder relationships

Maintaining good relationships with our doorstep communities, which is key, requires that we make a substantial investment in delivering on our SLPs and enterprise and supplier development. The investment in our employee home ownership scheme and our five-year wage agreement contribute to good relations with our employees and the unions