Northam Platinum CEO Paul Dunne said on Friday that the southern section of the eastern platinum belt around Lydenburg was rocked by 140 incidents of social unrest during its past financial year, the 12 months to the end of June.

That translates into almost three a week, underscoring the volatility of the region where several platinum group metals (PGM) producers operate. Northam’s mechanised Booysendal operation is right in the crosshairs, straddling the Limpopo/Mpumalanga border.

“Where we have rural populations who are struggling to have economic opportunity there’s great unhappiness, there is deprivation. That’s compounded by a failure of local government,” Dunne said during a media briefing.

“Where we work… those areas are struggling. And this gives a backdrop where the unhappiness of people can be expressed through sometimes unlawful and sometimes violent demonstrations.”

“Procurement mafias” feed off this despair and often gin up protests in such communities where poverty and unemployment are rife. Inventive tactics include jackknifing hijacked tipper trucks on access roads leading to the mines and throwing away the keys.

Fear, loathing and extortion on the eastern limb of South Africa’s platinum belt

Dunne said such disruptions cost the company 20,000 to 30,000 in lost PGM ounces in the previous financial year, between 3% to 4% of group production. So it represents a material threat to operations while adding to security and other costs, such as the money mining companies spend on upgrading infrastructure which local governments have failed to maintain. 

Still, the company was able to increase its production as Booysendal and other assets are in growth phases. 

“The group’s equivalent refined metal from its own operations increased to 716,488 ounces (F2021: 690,867 oz),” Northam said. “Notwithstanding the array of challenges faced during the year under review, our operations collectively achieved a steady increase in production and our growth projects remain on track.”

The upshot was that despite considerably lower prices, the company’s earnings for the full year declined only slightly from last year’s record earnings. Northam posted a 7.6% decline in operating profit to R14.6-billion. 

The board refrained from declaring a final dividend as Northam is locked in a tussle with rival Impala Platinum for control of Royal Bafokeng Platinum and needs the cash. Over the past two financial years, it did return more than R20-billion to shareholders through the acquisition of shares. DM/BM