Platreef mine opening in South Africa: project economics and design notes for engineers
Written by Tom Sullivan
First reported on MINING.com
30 Second Briefing
Ivanhoe Mines has officially opened the $2 billion Platreef platinum-palladium-rhodium-gold mine in Limpopo, feeding first ore to the stage-one concentrator on 29 October and producing first concentrate during the ribbon-cutting attended by President Cyril Ramaphosa. The operation targets about 100,000 oz per year of PGMs plus gold from the 18–26 m thick Flatreef orebody using mechanised bulk mining, with economic studies indicating an after-tax NPV (8%) rising from $1.4 billion to $3.2 billion and IRR from 20% to 25% as stages two and three come online. Local protests over jobs and benefits, despite over 2,000 nearby residents already employed and a 26% broad-based Black economic empowerment stake, signal ongoing scrutiny as expansions proceed into a platinum market WPIC now sees swinging from a 692,000-oz 2025 deficit to a 20,000-oz surplus in 2026.
Technical Brief
- Stage-one infrastructure centres on a $2 billion concentrator, which received first ore on 29 October and produced first concentrate during the official opening ceremony, signalling mechanical completion and transition into ramp-up.
- The mine exploits the Flatreef orebody with a true thickness of 18–26 m, enabling fully mechanised bulk mining layouts rather than narrow-reef stoping, with implications for higher productivity and lower unit costs per ounce.
- Initial production is configured for about 100,000 oz per year of combined platinum, palladium, rhodium and gold, with additional nickel and copper by-product credits improving revenue per tonne of ore mined.
- Economic studies at Platreef indicate an after-tax NPV (8% discount rate) of $1.4 billion and IRR of 20% for the first stage, increasing to $3.2 billion NPV and 25% IRR as the second and third expansion phases are brought online.
- Ownership of the South African operating company is split 64% to Ivanhoe and partners, 26% to broad-based Black economic empowerment shareholders and 10% to a Japanese consortium led by Itochu, shaping off-take, financing and local participation structures.
- The project is located 270 km north-east of Johannesburg in Limpopo, with the long lead time from original 2019–2020 production expectations to 2025 start-up underlining schedule risk for subsequent expansion stages.
- More than 2,000 employees are drawn from nearby communities, yet local protests at the opening over jobs and benefits point to ongoing social licence and labour-relations risk that will need active management during ramp-up and construction of stages two and three.
- Platreef is positioned as a low-cost, multi-decade primary PGM operation, with the thick, laterally continuous orebody supporting large-scale, long-life mine planning and potential for staged capacity increases without proportional rises in development metres.
Our Take
With platinum prices up 58% year-on-year and total platinum supply forecast to rise only 4% next year, Platreef’s multi-metal output in South Africa positions Ivanhoe Mines as a leveraged play on constrained PGM supply compared with the more gold–copper-focused majors in our database such as Barrick.
The 26% broad-based Black economic empowerment stake at Platreef aligns with the tighter ownership expectations we see across recent South African Mining items, which typically gives projects smoother permitting and social licence compared with legacy operations with weaker BEE structures.
An after-tax IRR stepping from 20% to 25% as Platreef scales is at the upper end of project returns in our recent Mining coverage, suggesting this PGM–nickel–copper complex could remain competitive on capital even if financing costs rise or if platinum demand growth moderates from the current 28% year-on-year surge.
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