Ivanplats to shake up platinum industry

Cape Town: Ivanplats, controlled by Ivanhoe Mines founder Robert Friedland, expects to produce platinum at negative cost at its giant Platreef complex in South Africa, potentially shaking up an industry squeezed by stoppages, rising wages and power charges.

Privately owned Ivanplats, whose other major projects include the Kamoa copper and Kipushi zinc operations in the Democratic Republic of Congo, said it would be the lowest cost producer of platinum in the world at Platreef, thanks to the discovery of the high-grade Flatreef ore body in 2010.

"I believe that it will be a negative cost producer of platinum group metals," Friedland told a gathering of mining executives. "The base metal endowment is strong enough to cover more than 100 per cent of the cash operating costs to produce platinum, palladium, gold and rhodium," he said.

Friedland said Ivanplats intended to build a fully-integrated processing facility and a series of underground shafts and to mine on a bulk scale, in a highly mechanised process.

"This couldn't be more dissimilar from the mines that are currently in the platinum mining industry or anywhere else in the world," he said. "This is a highly disruptive discovery of a world class nature that will have an extremely long life, and it will be the lowest-cost producer of platinum in the world."

Friedland said the high-grade Flatreef discovery had ore bodies 25 or 50 times thicker than those traditionally mined.

The South African platinum sector has been battered by weak markets, oversupply and squeezed margins and, most recently, has become increasingly vocal on safety stoppages.