Modern Mining July 2024

PLATINUM GROUP METALS

Risks of opening new PGM mines during depressed markets

With platinum group metals (PGM) prices taking a hit, miners developing projects are caught between a rock and a hard place. In fact, owing to subdued PGM demand, a low price environment and rising costs, the sector is gearing up for a round of retrenchments, which will see between 4000 and 7000 job cuts.

S o, what are the opportunities and risks at the PGM Day to a panel of PGM miners who are currently developing new multi-million-rand operations. The discussion, chaired by James Smith, Managing Director of DRA Global, offered Marna Cloete, President of Ivanhoe Mines; Schalk Engelbrecht, Finance Executive at Platinum Group Metals; Thando Mkatshana, Chief Executive, ARM Platinum; and Roger Baxter, Chairman of Southern Palladium, a platform to discuss the issues related to opening a new mine during a tumultuous time for the industry. The panellists were unanimous that commodities demand is cyclical in nature and that a key consideration when developing any mine is to ensure that, at the onset, it is de-risked as far as possible. This includes keeping costs low (operating at the lowest cost quartile) and taking on a phased approach when bringing large scale projects on-stream. Throughout the PGM associated with opening a new PGM mine at a time when the price environment is unfavourable? This was the question posed

Day, speakers highlighted the need for market development to underpin growth and create demand for the basket of PGM products. According to Cloete, the IvanPlats Platreef mine development decision was taken in 2011, more than a decade ago. Ivanhoe Mines indirectly owns 64% of the Platreef project through its subsidiary, Ivanplats. The Platreef palladium/rhodium/nickel/platinum/copper/ gold project is located on the Northern limb of the Bushveld Complex in Limpopo. Platreef’s 2022 feasibility study confirmed its potential to be the industry’s biggest and lowest-cost primary platinum group metals producer. For the Tier One discovery with a ’great basket of metals’, the investment decision – made many years ago – was “based on the massive orebody and the option to establish a mechanised underground mine operating at the bottom of the cash cost quartile”. According to Cloete, the decision to develop a PGM mine was underpinned by the belief that there is a space for every commodity. “Any decision taken is not based on the spot

Aerial view of the Platreef project.

Tier 1 deposits • Tier 1 deposits are large, long life and low-cost operations.

18  MODERN MINING  www.modernminingmagazine.co.za | JULY 2024