Wesizwe Platinum said on Tuesday the month-long unprotected strike at its flagship mine has been resolved, paving the way for the immediate resumptions of operations.
“This significant development follows the signing of a crucial peace agreement that marked the end of a prolonged period of labour relations negotiations,” the junior platinum group metals (PGM) producer said in a statement, without giving further detail.
Bakubung Platinum Mine is in the early stages of production after numerous delays, caused in part by technical glitches at its processing plant, as well as Covid-19 in 2020.
The construction of the mine in the North West started in 2011 and was initially scheduled to come into full production in late 2020 before the pandemic threw a spanner in the works, followed by community protests.
The project is expected to produce 420,000 ounces of PGM a year once it reaches full production, with a life cycle of 30 years.
China Africa Jinchuan Investments provided Wesizwe with a $227m (R4.27bn) cash injection in exchange for a 45% stake in the junior PGM player while China Development Bank provided $650m in project development funding.
The resolution of the labour dispute comes while PGMs and commodity markets are much lower than their recent peaks amid an uncertain global outlook.
Wesizwe and other junior miners are more vulnerable in a weaker commodity cycle than their bigger counterparts, which may have stronger balance sheets to withstand a protracted downturn.
PGMs are used primarily to reduce emissions in internal combustion engines, and in jewellery.
The Bakubung mine, a twin-shaft system, will deliver 1-million tonnes of ore a year to the processing plant, which has the same capacity.
The mine and the processing plant’s capacity will be increased to 3-million tonnes a year in 2026.
Its share price ended nearly 5% higher at 90c on the JSE on Tuesday, giving Wesizwe a market valuation of R1.4bn.
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