Operating costs surging to R5.6bn are hurting RBPlats’ share price

JOHANNESBURG – Royal Bafokeng Platinum (RBPlats) took a hit on the JSE yesterday, falling 4.38percent to R47.81 as the group failed to take advantage of strong metal prices and escalating costs, despite pledging an annual dividend policy for the year to the end of December.

The group said year-on-year cash operating costs surged to R5.6billion in 2019 from R2.7bn in 2018 as a result of Styldrift reaching commercial operating status on January 1, 2019.

RBPlats chief executive Steve Phiri said the group remained concerned about overall volume and cost performance that did not meet expectations.

“Records mean nothing if we are not optimising volumes. This is a volume game. We want to improve costs, margins and sustain production at Bafokeng Rasimone Platinum Mine (BRPM),” said Phiri.

RBPlats, which did not pay a dividend in 2019, announced that the board approved a minimum of 10percent of free cash flow, before growth capital, while maintaining discretion to consider balance sheet flexibility, and prevailing market conditions.