Northam Platinum (Northam) is to buy 50% of the platinum group metal (pgm) concentrates that will be produced by the Ivanplats Platreef Mine over a ten year period after the mine starts production in 2024.
The deal answers one of the main outstanding questions over the start-up of the Platreef mine in Limpopo province which was how it would get its production refined to the final metal stage because it has no plans at this point to build its own refinery.
Refining pgm concentrates involves complex metallurgical procedures to separate out the main base metals – copper and nickel – and then the pgms of which the most important are platinum, palladium, and rhodium as well as gold.
Major producers Impala Platinum and Anglo American Platinum use different refining technologies. Northam has its pgm concentrates toll refined by German metallurgical firm Heraeus.
Northam will buy 20,000t of pgm concentrate annually from Phase 1 of the Platreef mine although Ivanplats – the SA operating subsidiary of Canadian mining group Ivanhoe Mines – retains the option to reduce the offtake volume by up to a maximum of 5,000t reducing it to 15,000t/year.
Northam CEO Paul Dunne commented, “Northam is pleased to have secured significant future off-take of metal relating to a very important orebody. The metal content is especially favourable to Northam’s operational requirements and will be complimentary to our own production profile.
“The transaction serves to further de-risk Northam’s operations from a mine-to-market perspective providing additional diversification of supply over a ten-year period, whilst enhancing the flexibility and utilisation of our recently upgraded metallurgical processing facilities.”
Ivanplats also announced the remaining 50% of its first phase annual production of 40,000t of concentrate will be sold for an initial ten year period to Heron Metals which is a Trafigura joint venture.
It said the deals were done on “standard commercial terms for pgm mines in South Africa” and that Ivanplats “may elect to receive a provisional payment of 90% five days after the month of delivery.”
Ivanplats further announced on December 9 that it had negotiated stream-financing agreements with Orion Mine Finance and Nomad Royalty for a US$200m gold-streaming facility and a $100m palladium and platinum streaming facility. The funds will be used to “advance” the first phase of the Platreef mine.
According to Ivanhoe Mines president Marna Cloete the first phase of the Platreef mine is just a “starter” mine which can be expanded into one of the world’s largest pgm and nickel operations producing more than 24,000t of nickel and 1.1m oz of palladum, rhodium, platinum and gold annually.
On December 4, Ivanhoe Mines founder and executive co-chairman Robert Friedland was inducted into the American Mining Hall of Fame after previously being inducted into the Canadian Mining Hall of Fame in January 2016.
