Siphumelele 2 Mining Unit

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This is the Siphumelele Platinum Mine Mining Right and the mine is part of the Rustenburg Section and is owned and managed by Anglo Platinum. The mine consists of 3 active shafts, the Siphumelele 1 shaft which was formerly known as Turfontein shaft, the Siphumelele 2 shaft which was formerly known as Brakspruit Shaft, and the Siphumelele 3 shaft which was formerly known as Bleskop shaft.

SAFETY
Seven miners lost their lives during 2008 at Rustenburg Mine, including one at the Paardekraal 2 shaft project. This is nine fewer fatalities than in 2007, but is by no means acceptable. Management remains committed to reducing incidents through its safety programmes. The lost-time injury frequency rate (LTIFR) improved by 27% to 1.84, compared with 2.51 in 2007.

PRODUCTION
Equivalent refined platinum ounces decreased by 9% to 605,400 ounces, compared with 665,400 ounces in 2007. The lower output was the result of the Turffontein shaft closure for shaft rehabilitation work, safety stoppages and contractor strike interruptions, exacerbated by Eskom power supply disruptions in January 2008.

Output from UG2 ore sources increased from 68% to 74%, expectantly impacting on the 4E built-up head grades, which were reduced to 3.86 g/t from 3.98 g/t in 2007. The immediately available ore reserves increased to 16.6 months, up 41% from 2007.

COSTS
Total cash on-mine costs increased by 23% to R7.0 billion. The cash on-mine cost per equivalent refined platinum ounce increased by 35% to R11,500 as a result of the increased costs and lower volumes produced compared with 2007. The cash on-mine cost per tonne milled increased by 31% to R696 per tonne.

CAPITAL EXPENDITURE
Total capital expenditure increased marginally, to R2.2 billion in 2008. Stay-in-business capital expenditure amounted to R1.0 billion (2007: R900 million), while project capital expenditure was R1.2 billion (2007: R1.3 billion).

PROJECTS
Rustenburg UG2 Phase 2 project

This project was approved in 2002. Changing global economic conditions required a scope change, which was approved in February 2006, with a reduction in output from 400,000 to 275,000 tonnes per month. The project has been completed and is being closed out.

Paardekraal Merensky replacement project

The Paardekraal No 2 shaft project is designed to restore Merensky Reef output at Paardekraal, in line with the overall Rustenburg mining strategy. The aim is to mine Merensky Reef as the base operating horizon, for its higher unit value and to ensure sustained profitability. The UG2 horizon would be used to fill spare shaft-hoisting capacity, but not at the expense of Merensky production. The medium-term Rustenburg mining profile is predicated on a series of phased decline extension projects to existing shafts. Between 2014 and 2020, the production profile will be maintained by using either two or three intermediate vertical shafts. The Paardekraal No 2 shaft is the first of these vertical shafts. The first blast for construction of the ventilation shaft took place in September 2006, while construction of the man-and-materials shaft began in September 2007. Steady-state production from this shaft will reach 120,000 platinum ounces per annum in 2015. The surface infrastructure has been deferred.

Other projects

Replacing ore reserves on both the Merensky and the UG2 Reef horizons has necessitated the deepening of existing mine infrastructure at Frank, Paardekraal, Townlands and Turffontein on the Merensky horizon, and at Waterval on the UG2 horizon.

The Merensky ore reserve replacement projects for Frank and Turffontein shafts were approved in 2005 and are nearing completion. The Turffontein project has been handed over to the mining operations and its closure as a project is nearing completion, while the final handover of the Frank project to mining operations will have been completed in the first quarter of 2009.

The pre-feasibility studies for the Frank and Turffontein UG2 projects were completed in 2007, with a mechanised XLP mining option selected for Frank and a hybrid mining option for Turffontein.

The Waterval Phase 3 project was approved in December 2006 and development is progressing satisfactorily. This project will contribute 52,000 ounces of platinum production at steady state in 2009. The Waterval Phase 4 project was approved in November 2008 and execution has just started. This project will contribute 226,000 oz of platinum and will reach steady state in 2012. Studies for the Waterval Phase 5 are under way.

The Townlands ore replacement project aims to replace diminishing Merensky Reef output at that shaft by extending the existing decline shaft. Approval was granted in February 2007 and the project is making progress towards achieving its steady-state output of 70,000 platinum ounces per annum by 2014.

OUTLOOK
Rustenburg Mine is faced with a number of challenges in 2009, which include:

continued safety improvements from good foundations in 2008; the maintenance of immediately available ore reserves at current levels; reorganisation; cost management, including contractor labour management; and capital management.

Rustenburg is in the process of reorganising its operations. This involves the restructuring of the mine into five mines and a central services structure. This will result in more easily controllable entities, with an increased focus on productivity and costs. Each of the mines will have its own management structure, which will act and report independently. The names of the new mines and leadership will be announced in due course.

Cost and capital management will be the two primary focus areas for 2009 and will include a review of all contractor labour. Production is expected to be similar to that achieved in 2008.

Reference for information:
www.angloplatinum.com/business/operations/rustenburg_se...

www.angloamerican.com/aal/siteservices/search?freesearc...

angloplatinum.investoreports.com/angloplatinum_arpdf_20...