JOHANNESBURG (miningweekly.com) – Platinum group metals (PGMs) and chrome producer Northam has entered into a power purchase agreement with an independent power producer for an 180 MW solar farm at its Zondereinde PGM mine on the western limb of the Bushveld Complex.

“This will improve operational resilience and our cost position,” Northam CEO Paul Dunne stated during the company’s presentation of strong annual production, with the provision of power described as continuing to present risk, given the expectation of the State power utility’s electricity tariffs being set to remain above the consumer price index.

The solar-power facility will be built adjacent to metallurgical complex and will feed power behind the meter into the Zondereinde system. The 220 GWh/y of upcoming energy represents about 15% of the group's energy requirement.

Northam uses most of its energy at the deep-level Zondereinde mine-and-metallurgical complex, which absorbs a quarter of total group energy.

Being behind the meter means that it can't be curtailed, doesn't carry a wheeling charge and provides considerable resilience to any power disruptions going into the future.

“We keep working on looking at other opportunities, whether they be solar or wind, and we’re also looking at batteries, with watching briefs as prices for those various technologies change over time," Northam renewables programme lead Damian Smith explained to Mining Weekly during Northam’s roundtable media conference.

Also at Zondereinde, six newly commissioned diesel generators, each with a capacity of 4.6 MW, are in place.

“Current market conditions demand a cost response, and at group level, we have a moratorium on recruitment, except for essential safety and line production occupations,” said Dunne.

Long-dated Three Shaft surface infrastructure at Zondereinde has been delayed, raise-boring has been reduced to one machine, from two, and deepening development below 17 level ore tips has been halted.

At Booysendal, the South Merensky module has been halted and the BS4 decline temporarily halted.

At Eland, the Kukama decline has been restarted on a just-in-time basis and long-dated surface infrastructure  delayed.

STRONG OPERATIONAL PERFORMANCE

A strong operational performance allowed the Johannesburg Stock Exchange-listed Northam to post record production and record sales volumes.

Despite further PGM price weakening, revenue of R30.8-billion was generated.

“In light of the high degree of uncertainty in the current metals markets, we’ll continue to be internally focused. Cash conservation and preservation remain particular focus areas,” Dunne added.

The board has declared a final dividend of 70c a share, bringing the total dividend for the year to R1.70 a share.

“The focus of our growth strategy is developing, moving from building and diversifying our mining assets to expanding and optimising our processing capacity,” Northam CFO Alet Coetzee outlined.

“Our growth has necessitated an increase in the inventory we carry. This inventory is unencumbered, and we own its full value. Some of it sits within our furnaces, and this will remain but we are enacting plans to work through other stocks, one of which is our slag stockpile, and we recently commissioned our new slag plant,” Coetzee explained amid the display of a milling section of that plant with a slag stockpile in the background.

Working through 800 000 t of slag will add 15 000 PGM ounces a year over the next four years.

Focus on cost resulted in Northam recording a significantly lower operating profit of R4.8-billion on a production of 892 876 oz of four-element PGMs.