September 19, 2017

Mogalakwena Mine

Continuing to Intensify its Safety Programmes

Anglo America’ Mogalakwena Mine operating under a mining right covering a total area of 137m 2 is located 30 kilometres north-west of the town of Mokopane in the Limpopo Province, South Africa.

The current infrastructure of a mine that uses open-pit truck and shovel mining methods, consists of four open pits namely the Sandsloot, Zwartfontein, Mogalakwena Central and North Pits. The current pit depths vary from 110 metres (Mogalakwena North) to 245 metres (Sandsloot) and the ore is milled at the new fully operational concentrator and at the older South Concentrator. Mogalakwena Mine’s current LoM plan consists of an Ore Reserve of 89.1E million ounces and a Mineral Resource of 171.7 4E million ounces.

The mine has intensified its safety programme, with good improvements achieved in the last quarter of 2012 and this is after Mogalakwena had a very challenging year in terms of safety with an increase in the lost-time injury-frequency rate of 37 percent to 0.67 from 0.49 in 2011. The mine experienced only a single fatality in 2012.
Equivalent refined platinum ounces decreased 2 percent to 300,200 ounces in 2012. The reduced production was mainly as a result of 3 percent lower volume throughput in the concentrators and a 3 percent decline in the 4E built-up head grade caused by the lower tonnes mined from the higher grade Sandsloot pit.

The concentrator recovery improved by 5 percent year-on-year. A technical decision was taken during 2012 to stop mining the Sandsloot pit for safety reasons. Further technical work is required to establish if mining Cut 6 and below is feasible, which will be conducted during 2013. Cash on-mine costs increased by 20 percent to R3.30 billion owing to inflationary increases above CPI on electricity, wages, explosives, tyres and diesel exacerbated by:
R164 million less capitalised waste stripping incurred compared with 2011 acceleration of R98 million deferred waste stripping expenses for the Sandsloot pit, now stopped unexpected R142 million incurred on truck, shovel and drill repairs.

Cash on-mine cost/ton milled increased 24 percent to R315 per ton. Cash operating expenses (costs after allowing for off-mine smelting and refining activities) per equivalent refined ounce increased to R15,464, some 22 percent higher than 2011. The gross profit margin declined to 21 percent from 35 percent reported in 2011.
Total capital expenditure decreased to R1, 171 million in 2012 (from R1, 251 billion in 2011). Stay-in-business capital expenditure was R561 million (R596 million in 2011); while capital waste stripping came in at R399 million (R563 million in 2011) and project capital expenditure at R211 million (R92 million in 2011).
Capital projects at Mogalakwena Mine are largely focused on the Mogalakwena North Concentrator de-bottlenecking studies, the finalisation of infrastructure implementation associated with the Mogalakwena North Expansion Project, as well as closing out on the community relocation projects.

Project close-out on Mogalakwena North Expansion Project, infrastructural development and village relocation is planned for 2013 and project implementation approval for the Mogalakwena North Concentrator de-bottlenecking is targeted for 2013. It is also anticipated that Mogalakwena will start replacing its aging hydraulic shovel fleet with rope shovels from 2013 onwards.

Mogalakwena Mine will not be impacted by the Platinum Review. The operation is expected to improve its safety performance and increase equivalent refined platinum output to between 310 koz and 315 koz in 2013.

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