Royal Bafokeng Platinum (RBPlat) is affirming its position as one of South Africa’s leading mining operators through a proactive and concerted strategy to expand its influence across the Rustenberg area.
MORE THAN MINING
Located in the North West province of the country, Royal Bafokeng Platinum has built a largely unrivalled reputation and prominence within the sector, mining platinum group metals (PGMs) in the Merensky and UG2 reefs on the Boschkoppie, Styldrift and Frischgewaagd farms in the region. However, despite operating at designed levels of production and alongside some of the largest businesses in the industry, RBPlat refuses to rest on its laurels and is subsequently embarking on a new and exciting phase of development.
Incepted in 1999 as a black-owned and controlled entity under a Royal Bafokeng Holdings and Anglo American Platinum joint venture, the Royal Bafokeng Nation subsidiary first rose to notoriety through its role in the Bafokeng Rasimone Platinum Mine (BRPM) which produced its first platinum concentrate in that year and still forms a pivotal facet of RBPlat’s operations to this day.
Simmering beneath the surface of the processes that the Company has become so reputed for carrying out over the years though, is a philosophy and methodology which drives all progress strived for across the organisation.
“Starting with the ‘why’ and not the ‘what’ is very important when talking about Royal Bafokeng Platinum,” says the Company’s Executive Head of Operations, Neil Carr. “When you talk about RBPlat, you have to talk about its four pillars of strategy: towards operational excellence; flexibility of operations, organic growth and the pursuit of value enhancing opportunities.
“All of these are then underpinned by our aspiration to deliver and achieve ‘more than mining’; the motto which has been so significant to our business.”
‘More than mining’ incorporates an all-encompassing commitment not only to the business and its core mining activities but, just as importantly, to creating sustainable value for its stakeholders – positioning them to pursue greater objectives also – as well as establishing and building upon a positive influence within the region via numerous CSR and localisation initiatives.
RBPlat has played a significant role in the commodity market on the African continent since the end of the global financial crisis. As such, the Company ensures that it keeps ahead of the industry curve, forecasting and preparing to that effect.
GLOBAL MARKET OUTLOOK
- Global platinum demand, excluding investment, is forecast to rise by more than four percent in 2015 to 8.2Moz
- Platinum recycling is forecast to grow by more than eight percent, potentially dampening net primary demand growth
- A weaker macroeconomic environment and a stronger dollar suggest that platinum prices will remain relatively flat throughout 2015, at less than $1,300 per ounce, and if the rand continues to weaken against the US dollar, dollar denominated prices could be even lower
- In the long-term, the current recycling trend will peak within the next two years
- Demand in general will continue to grow steadily, despite a lack of expenditure in primary supply, limiting supply growth
- As palladium stocks deplete, higher prices and a structural market deficit are forecasted to persist, but this is not expected in 2015 with a well stocked market and subsequently dipping prices being seen at present
- Automotive palladium requirements are forecast to rise to around 80 percent, as a percentage of total demand, with China expected to show the highest demand growth
- Medium-term rhodium production growth is expected to be more constrained than neighbouring compounds due to the exhaustion of previous resources in recent years
- Differentiating within the globally cyclic mining domain isn’t always an easy prospect, but the size and subsequent versatility of Royal Bafokeng Platinum – as well as the extensive history and reputable ownership structure – has ensured that its position within the market at large is up there with the most reliable and progressive in the sector.
CONTINUOUS IMPROVEMENT RESULTS
- Stable labour relations – with minimal disruption as a result of industrial action
- Continued investments being implemented in expansion projects and development processes
- New long-term wage agreements to provide cost stability and certainty
- More than R400 million spent in the past five years across infrastructure, health, education, poverty, job creation and community skills development initiatives
- Complete adherence and surpassing of all Mining Charter Scorecard requirements in terms of the black economic empowerment (BEE) and employment equity
BAFOKENG RASIMONE PLATINUM MINE
In 1999, Bafokeng Rasimone Platinum Mine (BRPM) came into production having been developed by Anglo American Platinum, a subsequent 50/50 joint venture between the initial incumbent and Royal Bafokeng Platinum came into place in 2002. The joint venture was then restructured in December 2009 to allow RBPlat’s participating interest to increase to 67 percent , with operational control being transferred to RBPlat in January 2010.
“We soon translated this into a public vehicle by listing on the Johannesburg Stock Exchange in November, 2010,” Carr notes in reference to the BRPM. “BRPM consists of two operating decline shafts from surface, known as North and South Shaft,” Carr continues. “Each shaft produces approximately 100,000 tonnes a month of ore, which equates to around 2.4 million tonnes a year.
“At present, we have mined predominantly the Merensky ore body which makes up approximately 80 percent of our mining, while we have also opened up reserves on the UG2 which makes up the remaining 20 percent of our mining at BRPM.”
BRPM was designed and implemented as a conventional mining site, with the associated mining processes being in the form of traditional in stope handheld drilling with track bound footwall haulages.
Carr continues: “We are now developing deeper into the ore body through what we call the Phase III replacement project at our North Shaft which will open up the reserves from 10 level to the mine boundary at 15 level within that mine.
“It is a project that began at the end of 2010 and is scheduled to be complete in 2017. The project has a capital cost of R1.4 billion and will open up approximately 1.4 million 4E ounces.
“It’s all about exploiting the ore body and the reserves that we have available to us. It’s a natural progression within BRPM to take the resource to the end of its boundaries on Boschkoppie.
STYLDRIFT
Compared to the 6,000-plus people who are employed to work at the BRPM mine, RBPlat’s latest project currently being executed is set to take on a whole new dimension, in line with a concerted focus on innovating and developing ahead of the wider industry curve.
Styldrift I project execution began in 2009 and is a natural progression as part of RBPlat’s organic growth strategy in terms of harnessing the full opportunity available within the region.
The new underground mine will come at a capital cost of more than R11 billion, and is situated approximately five kilometres – as the crow flies – from its established BRPM operations; the Styldrift farmland and Boschkoppie area acting as a natural boundary between the two mines.
“Styldrift I is an exciting project, having started in 2009 and set to be ready for mining ramp up in quarter one 2016, and reaching steady state of 230,000 tonnes per month in quarter one of 2019,” Carr explains. “It’s a twin vertical shaft system with a 10.5 metre diameter main shaft which has been sunk to a depth of 758 meters and will have two 22 tonne rock hoisting skips and a single deck cage transporting 180 people.
“The services shaft has been sunk to a depth of 723 meters and will carry all the mine services and a smaller cage for transporting people.”
Within this project, the underground infrastructure will be developed to cater for large mechanised workshops, stores facilities and offices, replicating surface processes at the core of the operation.
Carr adds: “Initially, we will only be mining the Merensky ore body from this mine, but we have made provisions on the underground and surface infrastructure to enable us to mine the UG2 ore body concurrently.”
MECHANISED FOCUS
Styldrift I not only represents the next chapter in the overall growth of Royal Bafokeng Platinum, but represents an exciting development in regards to how the Company conducts its mining activities, with a bigger focus than ever before on mechanised operations.
Carr explains: “When one looks at the mining and platinum industry in South Africa, they see a predominantly conventional mining scene still, employing large numbers of people and handheld in stope drilling.
“With the ore body we have at Styldrift, however, we have the opportunity to take a more mechanised approach due to the reef being wider and shallow dipping, allowing us to place mechanised equipment underground.
“We will be able to do the mining using low profile equipment, LHDs, drillrigs and mechanised bolters.”
This system brings to the fold a lessened reliance on personnel volumes; instead replacing the conventional, extensive employee count with more highly skilled staff overseeing the mechanised operations.
“Styldrift I will typically run with just below 3,000 people at steady state,” Carr notes. “Compare that to BRPM’s 6,000 people on a smaller size operation – 200,000 tonnes a month compared to Styldrift’s 230,000 – this will bring about greater mining efficiencies, safer mining operations and cost benefits.
CONCENTRATOR EXPANSION
Complementing the Styldrift I project exists a plethora of capital investment activities across both mines to ensure that the latest trends and industry developments are being effectively adhered to. Similarly, these investments also occur as a result of RBPlat’s own organic growth and subsequent need to expand and enhance existing infrastructures.
This is currently being epitomised by the Company’s expansion within its BRPM concentrator plant which, currently, can process 200,000 tonnes of ore per month, from which it produces approximately 180,000 platinum ounces a year.
“The upgrade of the concentrator, which is currently under construction, will increase its capacity to 250ktpm, this will then be further upgraded to 350ktpm with the addition of a further 100ktpm module in 2017. This increased capacity will allow us to treat all the Meresnsky reef production from BRPM and Styldrift I,” the Company explains.
Carr adds: “The ore from the Styldrift shaft will be transported to the concentrator plant by overland conveyors.”
“We then have a concentrate offtake agreement with Anglo American Platinum where they smelt and refine our concentrate and produce the final metals.”
CAPITAL INVESTMENTS
The concentrator upgrades are indicative of the general Royal Bafokeng Platinum continuous improvement model based on an ongoing and dedicated involvement in capital investments. This ensures that the most modern technologies and systems are being implemented in the mines, when the reef dimensions allow.
In regards to BRPM this entails upgrades of longstanding processes within the conventional domain, but for Styldrift, the excitement lies in fast-forwarding to the most advanced and forward-thinking technologies and systems available, as Carr enthuses.
“We continue to introduce a number of new technologies into our organisation, including the low profile mechanised equipment I mentioned within Styldrift. The mine has been built around that approach so the whole infrastructure and lifecycle of the mine can be tailored towards that.
“We have subsequently included a drive in-drive out cage system to get the material from surface to underground, while we have also innovated the underground approach by putting all workshop infrastructure and major stores space in place.”
Underground offices for employees to work out of are also a work in progress, to build an entire working environment at the heart of what is sure to be a complex and advanced operation.
Carr adds: “It really holds key success potential for the business to have these new technologies incorporated into Styldrift.
“Technologies that we have implemented at Styldrift also include our new state-of-the-art winders, components and controls which provide up to 99 percent efficiency, high reliability, low operating costs, high quality of supply to the motor, and minimum network interference (low harmonics, high power factor) while, internally, we have worked to keep abreast of new systems to update our IT and enhance the way we run our business.
“All of these capital investments are examples of how we are using technology to drive our operations; they are key to how we make our business more efficient and therefore are very important to the future of Royal Bafokeng Platinum.”
SUSTAINABILITY
Sustainability and efficiency are key pieces of the overall Royal Bafokeng Platinum jigsaw, especially given the nature of the industry and the necessity to plan for a mine’s entire lifecycle. To have the correct procedures and systems in place from the offset are pivotal in order to sustainably evolve in the years to come.
Carr explains: “Sustainability is paramount in our focus going forward, and it is seen in many areas; not just in how we can produce ore from the ground.
“It is about how we interact with stakeholders, how we take care of our environment, how we connect with people, the communities and our suppliers. Every aspect is important in creating a sustainable business.”
From an environmental standpoint, this is seen via an all-encompassing monitoring and adaption to eco considerations across what is inevitably an industrially-driven operation. Showing willingness in this area is a major plus-point for stakeholders and supporting businesses in the supply chain who are under similar pressures to become more environmentally responsible; placing the emphasis on RBPlat’s door to lead by example.
“Throughout it all, we are guided by our sustainable and safety agreement framework, implementing sustainability in all aspects and ensuring we engage with our stakeholders,” Carr notes in introducing the ideology behind one of the Company’s major operational driving forces.
“Our mission is to provide a fundamental approach within our framework for sustainability,” Carr opens. “A management sustainability committee has been established to advise and drive the implementation of the sustainability policy, sustainability framework and other pertinent systems and processes.
“The committee has been established to assist the Board and its committees and is essential for the implementation and coordination of sustainable activity throughout the company.
“Materiality mapping processes further allow us to continue to identify, along with our stakeholders, a report to show the connectivity between material information on our strategy, governance, performance and prospects and how strategy affects and is affected by environmental, social and financial issues.”
Extra adherence to these trends is achieved through RBPlat’s involvement with the United Nations Global Compact (UNGC).
Carr continues: “RBPlat is a signatory to the UNGC and supports the 10 principles of the Global Compact with respect to human rights, labour, environment, and anti-corruption. We annually submit a Communication of Progress (COP) that describes our company efforts to implement the UNGC’s ten principles.
“Our overall efforts towards sustainable and transparent business practices confirm us as one of the best performers on the JSE Social Responsibility Index for the past three years, with our management based on international best practice, compliant in monitoring our environmental and social license.
“We are committed to preventing environmental pollution and are ISO 14001 certified, as well as enforcing this awareness through continuous engagement with our employees.”
CORPORATE SOCIAL RESPONSIBILITY
Closely tied in to the sustainability promise by Royal Bafokeng Platinum internally is an equally well-rounded and extensive, sustainable, approach to its external influence in the Rustenburg region.
Local inclusion is the banner under which the Company carries out a vast majority of its employment, charitable and partnership-building initiatives, once again laying the groundwork for processes that will remain successful throughout the lifecycle of the mines themselves.
“Our programmes integrate and ensure local inclusion of our communities, beginning in high schools where we help produce the kinds of skills that we would look to utilise in the future,” Carr explains. “The intention is to produce a major pool of skills so they can grow to be exemplary to the best use of their own commitment.”
Already, this has transpired through the development of unique skills from its graduate programmes, having seen individuals rise up the ranks to reach production manager status within the Company.
“We have four communities located around our mines, so we target our social projects and labour plans around those communities,” Carr continues. “Starting at ground level, we enhance the level of skills in the communities and this is a priority in regards to education, so we can later recruit from these communities and get these people into the business.”
Not only does this further compound its sustainability initiative, but this approach also addresses common industry challenges in finding the necessary skills; especially when it comes to the more contemporary, advanced systems procured for the Styldrift mine.
By training local people to operator and artisan level for mechanised equipment, the encouragement of internal promotion also elevates RBPlat to ‘employer of choice’ status; promoting longevity among prospective employees as well.
“We are 52 percent owned by Royal Bafokeng Nation so it would be remiss of us not to enhance the communities around our mines,” Carr says. “Therefore, our social labour plan is an important part of our community investment to make a difference and to deliver real results to a vast number of individuals.”
RBPlat has spent more than R413 million between 2010 and 2014 in meeting its social and labour plan commitments, both in areas of human resources development and local economic development.
“We have intervened in the area of the supply of quality high school students from our doorstep high school by supplying two mathematics and one science teacher and also by supplying a person to integrate the governance between primary and secondary schools in our doorstep communities,” Carr explains I regards to the education arm of this philosophy. “This will ensure that, over time, most of our bursary recipients and learnership participants are from the doorstep communities.
“Our bursary programme, in turn, feeds our graduate programme, from where we source our future professionals and our learnerships feed our supply of artisans and other skilled employees. This will improve the number of employees from the local community benefiting from our efforts.”
In developing doorstep communities RBPlat funds local economic development in the following areas:
- Poverty alleviation and job creation, where the Company is constructing a hub from which light industry can supply goods to the mine
- Agricultural Support, where RBPlat has intervened to assist farmers to improve the quality of livestock that they breed, as well as assist with supplementary grazing in an area where grazing is insufficient to sustain the livestock
- The building of household tunnels for subsistence farming while improving a garden for a local association of the blind to ensure large scale production
- Education Support, where the Company continues to build Grade R classrooms and intervene in improving the quality of maths and science students
- Health Support through the construction of a new Pathology Centre in Phokeng which will serve the entire area
- Infrastructure Support by involving itself in a roads programme with the community, as well as recently partnering with another mining company to put in place a water pipeline to supply water to all doorstep communities
- Community Skills Development where RBPlat is providing portable mining skills to members of the local communities to enable them to find employment in the mining market. All of this is carried out in close consultation with community leaders to ensure that alignment is not only kept with the regulator but that projects are acceptable within the chosen communities.
EMPLOYEE RETENTION
Sitting closely alongside the established commitment to local development is the Company’s internal HR strategy, which is responsible for monitoring this aforementioned recruitment process while also exploring new avenues and opportunities to identify rising talent and training schemes.
Carr says: “The recruitment of staff in our business is linked to our HR strategy where we’ve identified potential individuals and are developing them within the organisation. This key programme looks at internships and community training programmes in order to prioritise the local communities and students from the region.”
From a retention perspective, the Royal Bafokeng name alone instils a significant level of loyalty and longevity among key personnel, but the Company is also aware that it needs to remain innovative in a competitive environment to ensure it remains an attractive employment option for years to come.
“In regards to retention, we include unique benefits such as our housing project for low-level employees and retirement benefits to support this,” Carr states.
“Traditionally, mining in South Africa has been criticised by the way it carries out housing of employees, as well as the conditions that they live in.”
An initiative was subsequently worked out with the Company’s union, the National Union of Mine Workers, to develop a housing strategy unrivalled by those seen in the past.
Incepted in 2011, the past three years have culminated in more than 400 houses already being developed to advanced standards and dimensions in a secure Rustenburg environment.
Carr recalls: “We set out on a journey to achieve two objectives relating to housing and living conditions. The first is to restore the dignity of Royal Bafokeng Platinum workers and the second is to create long-term wealth in the hands of our employees. A house is an asset that appreciates in value while it is in use, and the employees will be able to liquidate the asset at the end of their careers or at least be able to continue to live comfortably post-retirement.
“Our employees are housed in a security estate that is rivalling the best of estates in South Africa and will, going forward, be able to enjoy a middle-class existence without having a crippling financial effect on them.
“Employees in 2014 bought a property of R500,000 and they commenced repayments at an affordable rate; this means that they enjoy a prime property without the financial strain that would otherwise come with it.
“This enables our employees to bring their families closer to where they work, it provides a more productive workforce where there should in turn be a positive impact on our safety performance.
“Funding has been secured to finalise Phase II of our Housing Project and we will thereafter go out to market to secure funding for a further Phase to accommodate Styldrift employees.”
SAFETY AND PEOPLE FIRST
Royal Bafokeng Platinum’s respect and care for its employees comes from an understanding that it is not possible to achieve sustainable business performance without high health and safety standards and performance; a realisation that drives the Company’s long-term strategies in that area.
Mining operations located in South Africa are subject to a variety of industry specific health and safety laws and regulations, formulated to improve and to protect the safety and health of employees. RBPlat therefore views safety as a priority, which is reflected in its values under the umbrella; Safety and People First.
Carr notes: “Our safety vision is “Zero Harm”, and our safety strategy model is based on three levels:
- The foundation level consists of our safety code of conduct, safety discipline and teamwork
- The second level consists of the four barriers necessary to prevent unwanted events; i.e. leadership, design, systems and behaviour
- The third level addresses latent defects that can lead to unwanted events
- “The safety principles which support our holistic safety, health and environmental strategy are:
- All injuries are preventable
- Our standards and procedures are non-negotiable and must always be applied”
RBPlat’s safety vision of “zero harm” ensures that every person working on the mine must go home unharmed every day.
Carr adds: “We subscribe to a safety culture where everyone takes responsibility for safety, as this will have the greatest impact on our ability to achieve resilience.
“Trust, respect, teamwork and an uncompromising commitment to the safety and health of our people is of utmost importance to RBPlat.”
SUPPLY CHAIN MANAGEMENT
Localisation is further engrained into the RBPlat value chain via its supply chain management ethos, where the Company seeks to promote black economic empowerment and local procurement across all operations.
“This is done through the application of our HDSA policies and procedures, and in pursuit of this policy, the primary focus is to support and develop local HDSA suppliers with mainstream procurement activity to align ourselves to the South African Mining Preferential Procurement Forum,” Carr says. “This is achieved without compromising RBPlat or putting the mining operations at risk.”
Optimising this facet has led to the retention of achievements within the procurement charters, which have confirmed the Company to be performing well across all indicators and categories. More importantly, it once again emphasises the overriding commitment to bringing value for all stakeholders, as Carr elaborates: “As part of our supply chain management strategy we strive to have effective stakeholder engagement, especially with enterprises and vendors.
“Regular consultation takes place with represented vendors while we connect with local SMEs via social engagement initiatives, as they remain very important to our business’s operations.”
MORE THAN MINING
Never one to stand still or simply go through the motions, the amount of investments, partnerships, innovations, expansions and enhancements will continue to combine for the benefit of RBPlat’s long-term future, and these are merely scratching the surface of what is one of the more progressive mining operations in South Africa.
In the short-term, a number of complementing key goals are in place, primarily supporting the overall mechanisation of the Styldrift project during its ramp-up phase.
Carr adds: “As part of our organic growth, we also have a mining area in the pipeline beyond Styldrift I called Styldrift II; a new mining initiative.
“We have completed the pre-feasibility study with an extensive exploration drilling programme now in place to better understand the ore body. Styldrift II is the future beyond Styldrift I once it is ramped up to steady state and will be a key piece of our organic growth in the future.”
The ongoing refinement and building of stakeholder relationships will complement this physical growth, alongside the continued commitment towards employee satisfaction and union collaboration.
Carr concludes: “It is all about keeping stability within our workplace and the communities in which we operate by engaging with them and creating a positive influence both for them and the growth of the business.
“We will look to create around us an improved infrastructure for education while also working hard on health and safety, and environmental issues.
“All of these things represent Royal Bafokeng Platinum and who we are, going back to the strategy which underpins it all, to be ‘more than mining’.”
