Ivanhoe Mines (TSX:IVN) has commissioned a $2bn platinum group metals (PGMs) mine in northern South Africa, as part of its broader African growth strategy, which includes copper and nickel developments elsewhere on the continent.

The project, located in the mineral-rich Bushveld Complex, positions Ivanhoe among the key international operators expanding PGMs capacity at a time of volatile global demand for platinum, palladium and rhodium.

The firm said in a release on November 19 that President Cyril Ramaphosa officiated at the event at Platreef Mine, which Ivanhoe founder and executive co-chairman Robert Friedland conceived some 40 years ago.

Ramaphosa described the investment as a “gigantic” step for his country.

“This mine begins its life opening a new page in our country,” he said. “This is the first mine that is really opening with the full involvement of the community, not only as workers but as equity owners, as owners of this wonderful resource that is going to be mined here … so this mine is breaking new ground, it is breaking history, and it is opening up a new chapter of how mining should really be done in our country.”

The mine’s phase one 800,000-tonnes-per-year concentrator produced its first concentrate on November 18 after the final stages of hot commissioning started on October 29.

Ivanhoe said the mine is set to be the lowest-cost primary platinum-group-metals producer globally. 

Its annualised second phase production will grow almost five times more than the initial phase output to 460,000 ounces (oz) of platinum plus 9,000 tonnes of nickel and 6,000 tonnes of copper.  The third phase will take platinum output to more than 1mn oz, plus 22,000 tonnes of nickel and 13,000 tonnes of copper.

Ivanplats, an Ivanhoe unit, used a $100mn loan it secured from Société Générale of France and Nedbank of South Africa to fund the construction of phase one at Platreef Mine.

Ivanhoe said it is in talks for a $700mn facility to construct the second phase, with phase three expansion to be underpinned by cash flow to be generated by the earlier phases.

Friedland said the November 18 commissioning is a culmination of the work he started in the 1980s.

“This will be the largest mine in the African continent for precious metals," he said. 

"Today we just have phase one, the baby mine … the first little bubble.  In two years, the giant shaft will begin, the largest shaft in Africa … all of this is because of the vision we received from President Ramaphosa in the early days."