Eastern Platinum says platinum group metals (PGM) production is expected to account for about 80% of its 2024 revenue as the soft restart of the underground mining will target high-grade PGM ounces and metallurgical-grade chrome by-products within the Zandfontein section.
Zandfontein is one of the three mines at Crocodile River Mine (CRM) in South Africa.
PGM ounces are also expected to account for 65% of Eastplats revenue from 2025 to 2026.
Company chief executive Wanjin Yang said PGM prices, on average, fell 40% year-over-year by December 2023.
He said the PGM price volatility, coupled with the reduced margins, resulted in operational restructuring, job cuts, and a widening of the global supply deficit for the basket of precious and industrial metals.
“However, despite the fall in PGM prices, it is important to remember that ‘the PGM basket price has not traded materially below the 70th percentile of the cost curve on an annual basis’,” said Yang.
“Eastplats has not been impacted [by] these larger PGM price effects in 2023 for a number of reasons. First, a large part of operational efforts has focused on the company’s retreatment project, the majority of which produces chrome concentrate. Second, Eastplats’ soft restart of the Zandfontein underground section at the CRM that focuses on PGM mining and eventually PGM production, will be executed in phases.”
He said the initial “soft restart” phase, which began in the fourth quarter of 2023, involved blasting and stockpiling of ore to begin processing in the first quarter of 2024.
The “soft restart” phase is expected to produce 40,000 tonnes of PGM ore a month by the end of 2024. The next phase will see operations ramp up to 70,000 tonnes of PGM ore a month at the end of 2025, operating at a steady state rate of between 70,000 and 80,000 tonnes monthly in 2026, said Yang.
He also said that low chrome supply at ports (in China) as well as fluctuations in Chinese yuan exchange rates against the US dollar are also believed to have supported robust chrome pricing in 2023.
Eastplats' tailings storage facility (TSF) retreatment project is expected to result in record annual revenues for 2023 of $100 million and will continue operating into late 2024.
The company continued to operate and optimise the TSF retreatment project at the CRM, producing both chrome concentrates and PGM ounces during the year.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished