the scraps are left.

BUSINESS DAY: -
Xstrata mulls chance to buy half of big platinum property
Xstrata has a R4,5bn project to sink two decline shafts at Eland as opencast mining draws to an end.
ALLAN SECCOMBE
Published: 2010/10/06 07:09:12 AM
XSTRATA will decide before the end of the year whether to exercise an option to effectively buy half of a large platinum project as it doubles production at its Eland mine.
Xstrata has a R4,5bn project to sink two decline shafts at Eland as opencast mining draws to an end. The capital includes construction of a second concentrator, so that by 2014 it will double output to 300000oz of platinum a year.
A concentrate off-take deal with Anglo Platinum should end in 2015, allowing Xstrata to investigate building its own smelter, said Ben Moolman, MD of Xstrata Platinum.
Xstrata has the option to buy in to 50% of one or more of Australian Securities Exchange-listed Nkwe Platinums five properties held in two projects on the eastern limb of the Bushveld Complex. Nkwe has resources of 20-million ounces and a target of 100-million ounces.
A bankable study of the Garatau project, comprising two farms, is undergoing a peer review to verify the study and pare costs from the capital budget, which has come in between R6,5bn and R8,3bn for a mine and concentrator.
Xstrata Alloys will look at the bankable (study) and, before the end of this year, make a recommendation which will be taken to the Xstrata board, Mr Moolman told Business Day yesterday.
It all depends on what comes out of the study and whether the economics stack up, he said.
Peet Nienaber, CEO of Xstrata Alloys, said: The eyes of this ore body have been taken and the scraps are left. If we use synergies between Nkwe and Xstrata Alloys we can make it work.
The southern parts of Nkwes land is near Xstratas large Lion ferrochrome smelter in Limpopo.
The project could deliver about 300000oz of platinum a year, matching the size of the Eland project, and which, when combined with the output from the Mototolo joint venture with Anglo Platinum , will bring Xstrata in line with Lonmin , the worlds number three producer of platinum, at 700000oz a year.
We have aspirations to become a decent-sized player in platinum, Mr Moolman said.
Xstrata is watching the platinum market closely to determine demand and supply dynamics, as well as future pricing scenarios, to determine whether to keep its 24,9% stake in Lonmin, or continue with a 2008 plan to take full ownership of the company. The financial crisis in late 2008 scuppered the 10bn acquisition of Lonmin, and Xstrata instead opted to take a strategic stake in the producer. It was never our intention to be a shareholder in Lonmin. We made it clear we wanted to take it over, Mr Moolman said.
Xstrata is drilling land neighbouring Eland and has applied for mining rights over it.
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