Mineral Resource and Mineral Reserve Statement 2017 Overview
Mineral Resource and Mineral Reserve Statement 2017
Supplement to the Annual Integrated Report 30 June 2017
The most significant PGM deposits in the world are located in the Bushveld Complex in South Africa and the Great Dyke in Zimbabwe. These PGM deposits contribute around three-quarters of global platinum output.
/ About Implats / Introduction overview
Implats embraces an integrated Mineral Resources Management (MRM) function. To this end, systems, procedures and practices are aligned and are continuously being improved to achieve this objective. MRM includes exploration, geology, geostatistical modelling and evaluation, mine surveying, sampling, mine planning, ore accounting and reconciliation and the MRM information systems.
/ Introduction and overview / Mineral Resource and Mineral Reserve Statement 2017 at a glance
The Mineral Resource and Mineral Reserve Statement as at 30 June 2017 is collated at a time when the platinum industry faces significant external challenges. The prevailing depressed metal prices are reflected in the fact that capital investment has virtually dried up throughout the industry. At Implats, greenfields exploration has been terminated and shaft sinking operations at Impala’s 17 Shaft and Afplats’ Leeuwkop Shaft remain suspended. Despite the difficult circumstances some operations continue to deliver strong production performances with a positive outlook to grow the Mineral Reserve inventory at Zimplats, Mimosa and Two Rivers.
The Implats structure remained unchanged during the past year with operations at Impala in the Rustenburg area of the North West province, the refinery at Springs in the Gauteng province, the Marula Mine in the Limpopo province, Zimplats and Mimosa Mines operating in Zimbabwe, the Two Rivers Mine near Burgersfort in the Limpopo province and the Afplats project near Brits in the North West province.
|Mineral Resources*||Moz Pt||191.6||194.0|
|Mt||2 787||2 741|
|Mineral Reserves||Moz Pt||22.4||21.6|
|* Mineral Resource estimates are inclusive of Mineral Reserves.|
Overall the attributable Group Mineral Reserve estimate did not change significantly and increased by 0.8Moz Pt to 22.4Moz Pt. Some 54% of the attributable Mineral Reserves (Pt) is located at Impala and a further 33% is hosted within the Main Sulphide Zone at Zimplats.
All mineral rights are in good standing without any known impediments. The Zimbabwean government (GoZ) has been pursuing greater participation in the mining sector by indigenous Zimbabweans. The Zimbabwe policy position on indigenisation was clarified in the 11 April 2016 policy statement, but there are ongoing discussions with the GoZ regarding indigenisation implementation plans for Zimplats and Mimosa. Depending on what position is ultimately taken by the GoZ, Implats’ attributable Mineral Resources and Mineral Reserves may be reduced. During 2013, the GoZ gazetted its intention to compulsorily acquire a large tract of ground in the northern portion of the Zimplats mineral lease, containing some 54Moz Pt. Such notice was subsequently reissued and at 30 June 2017, there has been no conclusion to this matter. Zimplats agreed in principle to release the bulk of the area subject to certain conditions and is seeking to have the matter solved amicably.
(for more detail see page 16)
The Mineral Resource and Mineral Reserve Statement is compiled in accordance with guidelines and principles of the South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves (SAMREC Code), the South African Code for the Reporting of Mineral Asset Valuation (SAMVAL Code) and Section 12.11 of the JSE Listings Requirements as updated from time to time. Supporting documentation includes detailed internal reports, SAMREC Table 1 reports, and regular third-party reviews. A summary list of Competent Persons who compiled this report is included in this document. While Zimplats complies to guidelines and principles of the JORC Code, the definitions are either similar or do not vary materially from the SAMREC Code.
(for more detail see page 10)
Implats subscribes to the principles of the SAMREC Code of transparency, materiality and competency. The overarching strategic key focus areas of Implats are:
- Maintaining prudent investment through the cycle
- Maintaining strategic optionality and positioning the Group for the future
- Improving efficiencies/profitability through operational excellence and safe production
- Conserving cash, especially while metal prices remain depressed
- Maintaining our social licence to operate.
(for more detail see page 10)
- Mineral Resources are reported inclusive of Mineral Reserves unless otherwise stated
- There are no Inferred Mineral Resources included in any of the Mineral Reserve estimates
- Mineral Resources are only converted to Mineral Reserves once a feasibility study has been concluded and the new project or existing mine has been budgeted for and approved by the Implats board
- The Mineral Resource Statements remain, in principle, imprecise and must not be seen as calculations. Rounding-off of figures may result in minor discrepancies
- The Mineral Resources and Mineral Reserves are estimated as at 30 June 2017 and will be affected by changes in the metal prices, exchange rates, operating parameters, cost and performance, permitting and potential changes in legislation
- The feasibility study of the next portal (Portal 6), a replacement for Portals 1 and 2, at Zimplats was completed. The project was approved by the board and construction has commenced
- The Mineral Resources and Mineral Reserves are estimated for the PGMs (excluding osmium) and gold only, while some details of the other by-products are mentioned.
(for more detail see page 27)
Long-term price assumptions in today’s money*
|Basket||US$/Pt oz||2 100|
|R/Pt oz||29 100|
Rigorous profitability tests are conducted to test the viability of the Mineral Reserves. A summary graph showing the price sensitivity of the total Group Mineral Reserves is depicted below.
Refined Pt production
1 529 800oz
Net cash from operating activities
R1 013 million
Attributable Mineral Resources (Pt ounces)
R3 434 million
Number of employees
(for more details see Implats Integrated Report 2017 at www.implats.co.za)
/ Scene setting / Regional geological settings
PGMs are a relatively rare commodity – only around 500 tonnes (excluding recycling) are produced annually, of which less than 230 tonnes are platinum – yet they play a progressively more important role in everyday life, such as in autocatalysts to control vehicle emissions, in the production of LCD glass and as hardeners in dental alloy. PGMs – primarily platinum, and the associated by-products, palladium, rhodium, ruthenium, iridium and gold usually occur in association with nickel and copper.
Nico Muller, CEO
Implats exploits platiniferous horizons within the Bushveld Complex (BC) in South Africa and the Great Dyke in Zimbabwe. These two layered intrusions are unique in terms of size and geological continuity. Mining mostly takes place as underground operations focusing on relatively narrow mineralised horizons, with specific mining methods adapted to suit the local geology and morphology of the mineralised horizons.
The Bushveld Complex
The Great Dyke
The Bushveld Complex is an extremely large (65 000km2), two billion-year-old layered igneous intrusion occurring in the northern part of South Africa. Rock types range in composition from ultramafic to felsic. The complex is not only unique in size, but also in the range and economic significance of its contained mineral wealth. In addition to the PGMs and associated base metals, vast quantities of chromium, vanadium, tin, fluorine and dimension stone are also produced.
The accompanying map (page 21) and schematic diagram (page 19) show the extent of the Bushveld Complex. The layered sequence, the Rustenburg Layered Suite, comprises five major sub-divisions. These are, from the bottom upwards, the marginal, lower, critical, main and upper zones as indicated in the generalised stratigraphic column below. Two horizons within the critical zone, namely the Merensky Reef and the Upper Group 2 (UG2) Reef, host extensive economically exploitable quantities of PGMs. These two horizons, along with other layers, which can be traced for hundreds of kilometres around the complex, are the focus of Implats’ operations. The PGMs – platinum, palladium, rhodium, ruthenium and iridium – as well as the associated gold, copper, nickel, cobalt, chromium and other minor metals and compounds, are mined concurrently, but recovered by different processes. Chromitite layers present below the UG2 Reef contain little to no PGM mineralisation and are mined by other operators for their chromium content.
Implats’ operations on the Bushveld Complex comprise Impala Mine north of Rustenburg, Marula Mine north-west of Burgersfort and the Two Rivers Mine, a joint venture between Implats and African Rainbow Minerals Limited (ARM) situated south-west of Steelpoort.
A detailed geological description of the various reef types is provided in the relevant operational sections. Examples of different Merensky Reef vertical grade profiles are shown above. It is clear that the grade distribution varies materially from area to area. The UG2 Reef morphology and associated vertical grade distribution also differs significantly between regions (see above), specifically in terms of the width of the main platinum bearing chromitite layer and in the number of layers. In general the grade increases if the chromitite layer width becomes thinner.
The Great Dyke is a 2.5 billion-year-old layered maficultramafic body intruded into Archaean granites and greenstone belts. It is highly elongated, slightly sinuous, 550km long, north-northeast trending with a maximum width of 12km. It bisects Zimbabwe in a northnortheasterly trend and is divided vertically into a lower ultramafic sequence, comprising cyclic repetitions of pyroxenite, harzburgite, dunite and chromitite, and an upper mafic sequence consisting mainly of norite, gabbronorite and olivine gabbro. The accompanying schematic diagram and map show the extent of the Great Dyke. It is U-shaped in section with layers dipping and flattening towards the axis of the intrusion. Much of the mafic sequence has been removed by erosion and at the present plane of erosion the Dyke is exposed as a series of narrow, contiguous layered complexes or chambers. These are, from north to south, Musengezi, Hartley (comprising the Darwendele and Sebakwe sub-chambers) and a southern chamber comprising the Selukwe and Wedza sub-chambers.
The Main Sulphide Zone (MSZ), host to economically exploitable PGMs and associated base metal mineralisation, is located 10m to 50m below the ultramafic/ mafic contact in the P1 pyroxenite. The PGMs, along with gold, copper and nickel, occur in the MSZ. A detailed description of the MSZ and the value distributions is provided in the relevant operations sections. Examples comparing different areas indicate that the grade profiles vary between areas and that the platinum and palladium peaks are somewhat offset. Typically, the MSZ consists of a 2m to 10m-thick zone containing 2% to 8% of ironnickel- copper sulphides disseminated in pyroxenite. The base of this nickel-copper-rich layer is straddled by a 1m to 5m-thick zone of elevated precious metals (Pt, Pd, Rh and Au). The base metal zone contains up to 5% sulphides, while the sulphide content of the PGM zone is less than 0.5%. This change in sulphide content is related to the metal distribution in a consistent manner and is used as a mining marker. It can normally be located visually in borehole core and with careful observation it can also be located underground, therefore careful monitoring supported by channel sampling and XRF scanning is required to guide mining.
Chromitite layers present below the MSZ contain little to no PGM mineralisation and are mined by other operators for their chromium content only.
Implats’ Operations on the Great Dyke comprise Zimplats’ Ngezi Mine south-west of Harare and the Mimosa Mine, a joint venture between Implats and Sibanye-Stillwater situated east of Bulawayo.
/ Scene setting / The environment
Our activities associated with the exploration, extraction and processing of Mineral Resources result in the unavoidable disturbance of land, the consumption of resources and the generation of waste and atmospheric and water pollutants. Growing regulatory and social pressure, increasing demands for limited natural resources and the changing costs of energy and water all highlight the business imperative of responsible environmental management, particularly as our underground operations become deeper and consume more energy and water. This involves taking measures to address security of resource supply (for example through efficiency, recycling and fuel-switching) and to actively minimise our impacts on natural resources and on the communities around our operations. These measures have direct benefits in terms of reduced costs and liabilities, enhanced resource security and the improved security of our licence to operate.
Implats has an environmental policy that commits the Company to conducting its exploration, mining, processing and refining operations in an environmentally responsible manner and to ensure the well-being of its stakeholders. The policy also commits to integrating environmental management into all aspects of the business with the aim of achieving world-class environmental performance in a sustainable manner.
Our management of the environmental impacts of our operations and processes involves the following focus areas:
- Ensuring full compliance with regulatory requirements
- Promoting responsible water stewardship by minimising water use and water pollution
- Minimising our negative impacts on air quality
- Responding to climate change risks and opportunities and promoting responsible energy management
- Managing our waste streams
- Promoting responsible land management and biodiversity practices.
All our operations have environmental management systems that are ISO 14001 certified and we are committed to retaining certification. In line with our environmental management system expectations, all operations are required to identify and report on environmental incidents. Systems are in place to investigate and determine the direct and root causes of incidents and to address and close out these incidents.
Further details relating to the materiality of environmental aspects, management processes, performance and commitments are reported in the 2017 Sustainable Development report. Rehabilitation provision is further discussed in the 2017 Implats Annual Financial Statements (refer in particular to notes 1.3.13 and 18). These reports will be published at www.implats.co.za in September 2017.
The financial provisions for the rehabilitation can be summarised as follows:
Name Current cost estimates R million* Financial provision R million** Impala Rustenburg 931 497 Impala Springs 245 186 Marula 111 44 Afplats 18 8 Zimplats 627 364 Totals 1 932 1 099 * The current expected cost to restore the environmental disturbances as estimated by third-party experts for purposes regulatory compliance is R2 282 million for the Group. The amounts in the table above for accounting purposes exclude VAT, P’s & G’s and contingencies. The Zimplats estimate includes P’s & G’s and contingencies ** Future value of the current cost estimates discounted to current balance sheet date as provided in the Annual Financial Statements of the Group.
In compliance with the DMR, the South African liabilities are secured through trust funds, insurance policies and bank guarantees.