Why, this time, ARM thinks Bokoni Platinum will fly

THE new development plan for African Rainbow Minerals’ Bokoni Platinum Mine amounts to a “completely different business proposition,” according to ARM COO, Jacques van der Bijl.Speaking at an investor presentation following ARM’s decisions to restart development of Bokoni – plus the operational restart of Nkomati Nickel – Van der Bijl commented: “The scale is different, the mining method is different, and the infrastructure approach is different.“The earlier approach was sub-scale and relied heavily on low-profile, on-reef development. The approved plan is reserve-led, phased, and designed around an integrated 180,000 tons per month operating system.”The main differences between the new development plan for Bokoni and that announced in 2022 by then ARM CEO Mike Schmidt are a completely different mining system and a huge jump in the forecast capital cost.Bokoni was placed on care and maintenance in 2017 after a number of mining companies – the last ones being Anglo American Platinum followed by Atlatsa Resources – were unable to make it profitable because of the difficult mining conditions encountered.ARM bought Bokoni in December 2021 for R3.5bn and, in September 2022, Schmidt told investors the group would invest a further R5.3bn over three years to redevelop the mine. The latest cost estimate is R15.2bn.According to Schmidt, plans were to develop an on-reef, low-profile mechanised mining operation on the UG2 reef instead of on the Merensky Reef, which the mine’s previous owners had concentrated on.ARM deferred the expansion of Bokoni in March 2024 because of “depressed PGM (platinum group metal) commodity prices and an uncertain outlook.”The proposed mining method has now been changed to “hybrid conventional mining” in which conventional stoping will be combined with mechanised off-reef development.The main reason given for the change is that mechanised on-reef development – described as the “early ounces” model – was going to result in a high grade dilution factor because of the steeply dipping nature of the orebody.Estimates were that the overall milled grade would drop to just over 4g/t compared with the 6g/t the new hybrid method is expected to produce. That meant much higher volumes of ore would have to be mined to achieve the target production levels.According to ARM CEO Philip Tobias, management has now selected “the optimum trade-off between grade, dip, capital intensity and operating cost.”But there’s an obvious question. Surely using conventional mining is going to expose the operations to the same mining problems which hamstrung attempts by previous owners to run the mine profitably?According to Schmidt, speaking in 2022, the use of mechanised mining would result in “greater extraction, higher productivity and far higher efficiencies coming out of the UG2 environment”. Asked about this, Tobias replied: “We have considered a number of options. After the ‘early ounces’ period of using the narrow reef mechanised equipment, we went back to the drawing board.“The orebody is generally a steeply dipping orebody, so, based on orebody characterisation, we had to really go back to a conventional stoping layout.“Yes, that does expose us to the same risks, but we have to come up with mitigation measures to make sure that we address those risks. Risk assessment has been done, and we do believe that we can mine safely and optimally still using the conventional mining method.”Tobias said a key factor was that the new mining operations would be done “at depth” instead of the previous mining operations, which were done at “shallower levels”.“With the support regime that we will be employing, it will be more prone to withstand whatever geotechnical challenges and issues we are going to face.”Van der Bijl said the increase in the capital cost estimate resulted from two main factors, which were the decision to build a new UG2 processing plant instead of modifying and refurbishing the existing 120,000t Merensky treatment plant, along with capital cost inflation.“There has been high – double-digit – capital escalation, especially during 2022 and 2023, following Covid. We have also made a higher contingency provision in this latest capital estimate than we made before,” he said.The post Why, this time, ARM thinks Bokoni Platinum will fly appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com