Anglo American Platinum Board has approved the Mototolo / Der Brochen life extension project. The development of the project leverages the existing Mototolo infrastructure, enabling mining to extend into the adjacent and down-dip Der Brochen resource, which will extend the life of mine beyond 30 years.
The approval of the project supports the Company’s strategic priority of maximising value from its core portfolio of assets, investing capital into this life-extension project which is expected to be value-accretive and generate strong returns.
The Der Brochen UG2 orebody will use the same bord and pillar extraction method as Mototolo mine, and will be a fully mechanised operation, positioned in the bottom half of the primary PGM producer cost curve.
The project includes development of a new shaft to replace the depleting Mototolo reserves (Lebowa and Borwa shafts), maintaining the 240,000 tonnes per month mining rate. With the completion of the concentrator debottlenecking project in Q3 2021, production from Mototolo / Der Brochen is expected to be maintained at around 250,000 PGM ounces per year.
The execution of the project will begin in Q1 2022. The total capital investment is expected to be $245 million) in nominal terms. Capital investment is over six years, with the majority of capital invested in 2022, 2023 and 2024. The financial returns of the project are expected to be robust, with an IRR of over 25% and payback of around six years from first production (expected in late 2023), based on consensus pricing.
Natascha Viljoen, CEO of Anglo American Platinum, comments: “The Der Brochen project is one example of the high-quality, low-cost expansion options we have available in our existing portfolio of assets that will allow us to continue delivering industry-leading returns to shareholders. We are also progressing our various workstreams at Mogalakwena to ensure we realise the full potential of this world-class resource to the benefit of stakeholders for many decades to come. In addition, the strong performance by our processing operations over the period illustrates the significant work we have been doing to improve asset reliability in the business. Despite the challenges posed by Covid-19, our business is well-positioned to continue benefiting from the strong market fundamentals for PGMs.”