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November 30, 2023
Pilanesberg Platinum closes as price slump claims scalp

LOW platinum group metal (PGM) prices have claimed another scalp with Pilanesberg Platinum Mines (PPM) telling employees the operation would close from Friday (December 1) until further notice.

Erich Clarke, CEO of PPM said in a letter that “all extraction and processing operations will be suspended”. Employees were to remain off-site from December 2. This was after ‘right-sizing’ the mine in August “failed to mitigate the adverse effects of prevailing economic conditions,” said Clarke.

Inflationary pressures and “limited access to capital markets” had also forced the company’s hand, he said. Restructuring would take place in terms of a Section 189 notice of South Africa’s Labour Relations Act.

The Pallinghurst Group, a private equity firm, has a stake in PPM through its Sedibelo Resources, an entity that Pallinghurst sought to list several years ago until delaying its plans in September 2022. Non-executive chair of Sedibelo Platinum, and Palllinghurst’s co-founder, Arne Frandsen said PPM would undertake maintenance while employees were off-site.

“Given the low prices and the low productivity during the holiday period, we have moved the yearly maintenance forward to December,” he said. “We will use the downtime to analyse, optimise and right size the operations to match the economic reality. Can’t say more now.”

Frandsen also declined to say how many employees would be affected, but confirmed PPM produces between 100,000 to 150,000 ounces of PGMs annually.

The closure of PPM is another signal regarding pressure in the industry, especially among smaller operators. Wesizwe Platinum announced plans last week to cut staff heavily at its Bakubung PGM mine following an illegal strike and a change in mining method, and owing to pressure from weak metal prices.

The palladium price has halved in value in the last 12 months while the price of rhodium has fallen from just under $14,000 per oz to a current price of $4,450/oz, according to semi-fabrictor Johnson Matthey.

On Wednesday Sibanye-Stillwater said it would cut about 287 jobs from its US PGM mine Stillwater Mining following a halving in the price of palladium since it last restructured the operation. On October 25 it issued a Section 189 notice over several shafts in its South African PGM business.

Impala Platinum said it was looking to cut staff through voluntary retrenchment whilst a report by Bloomberg News said Anglo American had consulted with the South African government regarding job cuts at its 79% owned Anglo American Platinum.

PPM is situated on the western limb of the Bushvled Complex. The mine consists of the Sedibelo Central, Magazynskraal, and Kruidfontein farms, described by Sedibelo Resources as ‘The Triple Crown’. PPM has an estimated resource base in excess of 60 million 4PGE ounces and is considered one of the world’s largest undeveloped PGM deposits

Other shareholders in Sedibelo Resources include the South African government’s Industrial Development Corporation, which has a 15.7% stake, and a 25.7% stake owned by the Bakgatla-Ba-Kgafela Tribe. Minority shareholders account for around 12.3% of Sedibelo’s share capital, according to the firm’s website.

The post Pilanesberg Platinum closes as price slump claims scalp appeared first on Miningmx.

 

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