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Production: Marula produced 70 400oz of platinum-in-concentrate, and 185 700oz of PGMs-in-concentrate an increase of 8% respectively year-on-year. However, this was less than had been planned.

Although the year began well, labour disputes and shaft closures following the fatal incidents negatively affected implementation of the new mining plan. This was exacerbated by the problem of skills retention. Consequently, the planned ramp up in production from conventional stoping is somewhat behind schedule. The footwall capital development project is also slightly behind but will achieve full monthly production of 200 000t in FY2010

Tonnes milled increased fractionally to 1.45Mt. The average head grade for the year was 4.44g/t, up on the 4.09g/t achieved in FY2007, largely owing to the higher grade conventional production from the footwall project at Clapham.

While overall ground conditions are good, the presence of geological structures posed a challenge. To address this, panel lengths will be reduced to 21.5m from 24m during FY2009.

The high turnover of artisan staff affected trackless fleet maintenance. An improved maintenance programme was initiated and good progress was made. Some trackless units have been rebuilt while others will be replaced during FY2009.

Marula is committed to the drill-jig technology but implementation is proving more difficult than expected. While there has been no resistance to its use, there have been maintenance problems. More positively, use of this technology has been accompanied by the installation of roof-bolts, which has reduced the incidence of falls of ground.

Metallurgical recoveries at the UG2 plant of 88.3% remained on plan (FY2007: 88.5%). Minor modifications to the plant are required to meet full capacity of 2.4Mt annually in FY2010.

Marula's social and labour plan for both the existing mine and the Merensky project, which includes the accompanying local economic development projects, was approved and the mine was granted conversion of its mining licence.

Marula's Eskom power allocation is sufficient to run both the UG2 operation at full production and to develop the Merensky project. However, it is insufficient to run both of these operations at full production.

Costs: Costs per tonne milled rose by 20.8% to R476/t, largely owing to inflationary pressures and the escalation in prices of inputs, especially labour, steel and diesel. Unit costs per platinum ounce-in-concentrate increased by 11.9%, a result of inflation and the lack of volumes. The latter was a result of the labour strike, geological problems in some sections of the mine and power supply constraints.

Costs per platinum ounce excluding share-based payments increased by 6% to R9 020/oz.

Capital: Capital expenditure totalled R345 million, up from R280 million in FY2007.

This was spent mostly on the footwall conversion project, replacement of machinery, drilling, engineering related to the Merensky project and housing.

The Merensky project accounted for R22 million of this amount. Planned capital expenditure on this project, should it be approved, is estimated at R364 million for FY2009. In all, planned capital expenditure of R838 million for FY2009 is to be spent on the footwall project, surface construction of the box-cut, housing and replacement capital.

Growth: The Merensky project feasibility study has been completed and will be presented to the board in November. Its approval will be subject to a guaranteed supply of power sufficient to operate both the existing mine and the planned Merensky project, and the resolution of outstanding community issues. Should this project be approved, development will begin in FY2009. Production is scheduled to begin in FY2014 with annual production of 115 000oz of platinum scheduled for FY2016. This will take total annual production at Marula to 245 000oz of platinum.

Marula key statistics

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