Northam Platinum, which operates the worldÔÇÖs deepest platinum mine, has announced it will start construction of a new R6 billion (Ôé¼553 million) mine at its Booysendal site in South Africa.
The mine, located in Lydenburg, in the east of the country, is predicted to produce around 130,000 ounces of platinum, palladium, rhodium and gold each year in its first phase of construction, which is expected to last around 20 years. Production is expected to commence in 2013.
During the initial phase, expansion would take place allowing for the second phase, which could see production increase to around 245,000 ounces per year.
Northam said in a statement that the asset has ÔÇ£significant inherent flexibility and growth potentialÔÇØ.
Booysendal is situated on the eastern limb of the Bushveld igneous complex, a geological formation measuring around 50,000 square kilometres that holds the worldÔÇÖs richest reserve of platinum.
Johannesburg-based Northam, a unit of black-owned Mvelaphanda Resources, has now completed its feasibility study on Booysendal and is waiting for final board approval for construction, which should be given early next year.
Production at Booysendal would more than double NorthamÔÇÖs output and rank it the fourth-biggest platinum producer in the world.
Northam CEO Glyn Lewis commented: "Booysendal is living up to our expectations and is likely to be a significant, long-life producer, and one of the new-generation PGM mining projects of the future.ÔÇØ
South AfricaÔÇÖs power utility Eskom has undertaken a feasibility study for an 80MV substation to be constructed on the Booysendal site.
Northam acquired control of the mine in August 2008, having begun its feasibility study two months earlier.
Last year, Northam, which has a combined resource base of 130 million ounces, attracted takeover interest from Johannesburg-based Impala Platinum Holdings, though the acquisition was abandoned following a sharp drop in platinum prices.
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