Northam Platinum, as its peers, has declared force majeure on its supply of platinum group metals (PGMs) to its four customers and it is considering limited mining at its mechanised Booysendal operations.
Companies declare force majeure, a clause in contracts that frees them from obligations when something happens beyond their control, in this case, the global Covid-19 pandemic that has claimed 44,264 lives and infected 887,067 people, according to Johns Hopkins University.
Northam, unlike Sibanye-Stillwater, Anglo American Platinum and Impala Platinum, the world’s three largest sources of PGMs, does not refine its own metal once the base metals have been removed. All these companies have declared force majeure, stopping regular flows of metal to customers.
Its partner, Germany’s Heraeus, is the biggest refiner of its PGMs but it also sells its PGM-rich material to its main customers, such as BASF, Johnson Matthey and Mitsubishi.
With its mines and concentrators stopped in terms of the 21-day national lockdown implemented in SA on March 27, Northam is operating just one of its two furnaces to process stockpiled concentrate. It is not running its converter or base metals refinery.
“These are abnormal circumstances external to us. The force majeure letter is a formality. We are still selling what metals we have, but of course we can’t continue selling,” said Leon van Schalkwyk, Northam’s spokesperson.
Northam is in talks with unions and its workforce at the highly mechanised Booysendal operations in Limpopo about potentially restarting the shallow shafts and concentrators on a reduced throughput basis, but this was likely to be later in April after the Easter break, he said.
Meanwhile, at its Zondereinde processing complex, it is treating stockpiled concentrate, running it through a single furnace, using a staff of about 15 people per shift, which made it easier to keep distances between people to prevent the transmission of the virus as well as ensure they were adequately supplied with protective gear and sanitisers.
There was not enough material passing through the furnace to justify putting it through the converter and base metal refinery, but the intention was to have as much metal as possible as close to completion as the company could get it, so that it could quickly realise revenue once the lockdown ended.
“We want to get our metals closer to cash, so if logistics improve or conditions improve, then we can move quickly,” van Schalkwyk said.
The furnace started operations on Wednesday morning after securing permission from the minerals department.
Northam produced 520,000oz of platinum, palladium, rhodium and gold in 2019, a 53% increase from 2015 when it started a R10bn investment programme in new mines and expansion. The company has about 300,000 tonnes of ore stocked at its concentrators and it is assessing processing this material after Easter, and this needs about 40 to 50 people.
The second furnace is idled and in need of a rebuild, something that will happen around December. The rebuild cannot happen during this lockdown because the furnace needs components not immediately available.
Northam has consignments of its PGM-bearing material that have been shipped to Heraeus, its main customer overseas
Sibanye and Implats both have mines and plants in North America where PGMs are regarded as strategic minerals and the US and Canadian governments respectively have given their approvals to continued mining.
Implats, Sibanye and Amplats have mines in Zimbabwe, where mining is continuing at operations that are remote, such as at the assets of Zimplats, which is 80% owned by Implats.
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