South African Government Invests in Platinum ‘Mega-Mine’

Rustenburg platinum mine
Rustenburg platinum mine

South Africa’s state-owned Industrial Development Corporation (IDC) has made a R3.24-billion (US$420-million) investment in a public-private mining and beneficiation venture that aims to become one of the world’s top four platinum producers within the next five years.

The IDC will hold a 16.2% stake in the venture with local investment consortium Pallinghurst Resources and the Bakgatla-Ba-Kgafela community, which owns a significant portion of the land in the vicinity of the Pilanesberg National Park in South Africa’s North West province, where the venture will operate.

The deal, announced on Thursday, will involve the consolidation of the platinum group metals (PGM) interests controlled and owned by the Bakgatla and Pallinghurst – including the assets of former JSE-listed company Platmin.

Consolidation of three properties

This will facilitate the optimal development of three previously stand-alone contiguous properties into a single “mega-mine” comprising “a large, shallow and low-cost mining complex, with long life (in excess of 30 years) and a strong growth profile,” the companies said in a statement.

The consolidated company – dubbed NewCo in the interim – will have a resource base of approximately 70-million ounces, the majority of which are shallower than 600 metres, “making this one of the safest and most energy-efficient new generation PGM operations in the world”.

The joint venture has the potential to create some 9 000 direct and permanent jobs, the companies added. NewCo and the IDC will also form a joint venture to explore, and ultimately fund, opportunities in PGM beneficiation and processing.

“These opportunities are expected to provide local community benefits, as well as energy-efficient and environmentally-advanced industrial solutions for the benefit of the entire PGM industry in South Africa,” the companies said.

‘First step to PGM beneficiation’

IDC CEO Geoffrey Qhena said the IDC’s equity funding had been the catalyst required to implement a consolidation plan developed by Pallinghurst over the last five years, resulting in a partnership would “transform the local platinum mining and beneficiation landscape.

“This investment is the first step in developing downstream beneficiation of PGMs, and demonstrates the IDC’s commitment to the development of South Africa’s mineral beneficiation industry,” Qhena said.

Brian Gilbertson, chairman of both Pallinghurst and Platmin, said the partnership aimed to create “an industry-transforming entity, generating capital investment and jobs for South Africa”.

Pallinghurst CEO Arne Frandsen said the beneficiation partnership with the IDC “has the potential to transform the PGM smelting industry and to provide third-party juniors access to cost-efficient concentrate processing”.