jv platinum profile poised for growth...

http://www.miningweekly.com/article/pillay-2011-04-07

Joint venture platinum profile poised for growth, says Anglo Platinum?s Pillay
By: Martin Creamer
Published: 7th April 2011

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JOHANNESBURG (miningweekly.com) ? The contribution to production from joint ventures is expected to grow to as much as one million ounces a year, says new Anglo Platinum executive head of joint ventures Vishnu Pillay.

Currently, Anglo Platinum?s joint venture operations contribute 30% of overall production, which Anglo Platinum expects to be 2,6-million ounces in 2011.

The former head of Gold Fields South Africa tells Mining Weekly Online in a video interview that the increased contribution from joint ventures is expected to arise out of increased levels of partnership with new entities, as well as with existing partners, who have the ability to sustain current levels of production and to grow within their existing properties.

?We want to consolidate and start growing the eastern limb through existing and new partnerships. We want to pull together our holdings at De Brochen, Twickenham and Ga Pasha and to grow the industry.

?We?re also working on collapsing the farm fences and realising value across them through co-operation,? says Pillay.

Anglo Platinum has a number of properties on the eastern limb of the Bushveld Complex that are seen as being ripe for exploitation.

On the western limb, its most significant partnership is at the Bafokeng Rasimone mine, and opportunities include arriving at the best way of returning some of its mothballed shafts to production, including shafts 2 and 3 at Siphumelele, as well as optimising its polling and sharing agreements with Aquarius.

?There are significantly greater opportunities for better exploitation of the platinum resources on both limbs of the Bushveld Complex,? Pillay tells Mining Weekly Online.

While Anglo Platinum entered into several of its existing joint venture transactions in order to secure its licence to operate and obtain new-order mining rights, Pillay points out that it has also engaged in transactions aimed at the optimal extraction of platinum resources across mine boundaries and is intent on doing more of these collaborations.

?That?s a key driver going forward,? he says, adding that the company is intent on sharing infrastructure and services with partners in order to reduce the costs of production and to ensure sustainability.

?Our contribution is not only to empowerment, but also to optimising the exploitation of the orebody beyond the farm fences,? Pillay adds.

Anglo Platinum?s joint venture operations include transactions with Anooraq at Bokoni, African Rainbow Minerals at Modikwa, and Xstrata at Mototolo on the eastern limb, and joint ventures with Lonmin at Pandora, Aquarius at Kroondal/Marikana and Royal Bafokeng Platinum at Bafokeng Rasimone on the western limb.

The production from the joint ventures together with Anglo Platinum?s many own mines will make up the 2,6-million ounces that the company expects to mine in 2011.

Anglo Platinum is budgeting to spend R7,5-billion capital in total in 2011 on both managed mines and joint ventures, with the joint ventures R1,5-billion of the total spend.

?The way we manage our joint ventures is that we carry 50% of the costs and we contribute 50% of the capital,? he says.

Funding estimates for new projects including De Brochen, Modikwa Deeps, Twickenham and the expansion to Ga Pasha and Bokoni is still under evaluation.

?We?re working well with our partners and there?s significant capital spend currently and planned.

?Our strategy going forward is to consolidate the eastern limb of the Bushveld complex, which is high on my priority list. The coonsolidation will not just be through rights and properties, but also collaboration on the provision of services including health and training, and procurement, so that we have a critical sphere of influence on the eastern limb, which has still to be developed as comprehensively as the western limb,? Pillay adds.