Kroondal

Overview

Conceived in 1996, Kroondal Platinum Mine – Aquarius Platinum's first and flagship operation – commenced production in August 1999.

In early 2003, Aquarius entered into a P&SA with Anglo Platinum, whereby the two companies share revenues, costs and capital.  In terms of this agreement, the Anglo Platinum reserves adjacent to Kroondal were incorporated into the Kroondal mine plan.  More recently in 2010, following the conclusion of the Firstplats transaction and the inclusion of its assets in the P&SA2 with Marikana, Kroondal acquired additional resource and reserve ounces from Anglo Platinum.

During the year, Kroondal also gained access to some of Siphumele's 2 and 3 reserves following the conclusion of a tribute agreement with RPM.

The capital-intensive small-mine concept developed at Kroondal revolutionised the South African PGM industry. Essentially, the concept incorporates the use of key contractors, highly mechanised mining operations and the outsourcing of high-cost, high-risk smelting and refining operations. As a result, productivity levels at Kroondal rank among the highest in the industry

Location

Kroondal is located approximately 120 kilometres north-west of Johannesburg, on the Western Limb of the world-renowned Bushveld Complex, near Rustenburg in the North West Province of South Africa.

The mainstay of the economy of North West Province is mining, which generates more than half of the province's gross domestic product and provides jobs for a quarter of its workforce.

Rustenburg - the 'resting town' in Afrikaans and Dutch - is situated at the foot of the Magaliesberg mountain range. Platinum mining in Rustenburg began in 1929, shortly after the discovery of the Platinum Reef by Hans Merensky.

Climate is temperate humid subtropical with very warm summers and mild winters.

Geology & Mineralization

Kroondal mines the UG2 Reef contained in the Kroondal and Townlands blocks. The UG2 Reef outcrops on the Kroondal property and dips to the north at approximately 9 degrees. This orebody comprises two mineralised seams – the Main and Leader seams – which are separated by a one-metre pyroxenite zone commonly known as the parting.

In 2011, the adjacent Hoedspruit property was acquired and its PGM reserves altough deeper than that of Kroondal have the potential to extend the mine's life.

Mining & Operation

The underground mining operation has four operating decline sections - Kopaneng, Simunye, Bambanani and Kwezi. The underground mining method employed at Kroondal is board and pillar stoping.

A new decline was started in 2010, and to end of 2011 advanced a total of 543 metres. The new K6 shaft that was under construction would help access new underground reserves. Stoping operations will begin at K6 in 2013. Work has begun on the surface conveyor system.

In 2011, mining has also begun at the Bambanani shaft accessing Anglo Platinum's Siphumelele reserves.

The 2011 production was down 18% to 208,600 equivalent refined platinum ounces compared to 2010 due to the implementation of stringent support standards which disrupted mining cycles, due to regulatory safety stoppages and lack of stoping face availability.

Processing

Kroondal has two concentrator plants (K1 and K2) with a combined monthly processing capacity of 577,000 t.

A Dense Media Separation (DMS) process in the concentrator plant removes further waste from the ore stream, effectively upgrading mill and flotation speed.

Kroondal has a concentrate offtake agreement with Impala Refining Services until early 2008. Thereafter, in accordance with the P&SA, all smelting, refining and marketing of output from Kroondal, including that from the new plant, goes to Anglo Platinum.

Along with platinum Kroondal also produced palladium, rhodium, chromite and gold.

Environment & Community

With several operations in South Africa, Aquarius Platinum is one of the first companies to complete the equity component under the Black Economic Empowerment Charter and the Mineral and Petroleum Resources Act. Aquarius is committed to being a responsible employer and corporate citizen, encouraging sustainable initiatives in the areas and communities surrounding its operations. Kroondal is represented on the provincial subcommittees of the Integrated Development Plan (IDP) which focuses on infrastructure development and access to basic services, local economic development and job creation and HIV/AIDS.

In 2011, the mine registered one fatality, prior to which two million fatality free shifts were recorded. An underground fire was also reported as causing a large number of minor but reportable injuries.