But by being incorporated into Rustenburg, we are therefore able to unlock the 1.7 million ounces and extend the life of these assets out well into the middle of the next decade. I think importantly and as a heads up to the market, when we do close the transaction in the middle of the year, Kroondal effectively gets amalgamated into Rustenburg. And that also means that we will transform from a purchase a concentrate agreement that we currently have with [indiscernible] to a toll treatment agreement. What this essentially means is that our overall operating costs at Kroondal will increase. So essentially we will incur additional tolling costs that will increase the total operating cost base. However we also achieve 100% of revenue. So under the current purchase of concentrates agreement, we only receive a percentage of the total revenue basket, whereas under the toll agreement we receive 100% of the revenue basket.
The net increase in the revenue received does exceed the increase in the costs and therefore the overall margins will increase from the Kroondal operations once the tolling agreement is instituted around the beginning of this year, albeit you will see that increase in unit costs and increase in associated margins. Thank you very much. And with that, I will hand over to Charles to take us through the U.S. region. Thank you.
Charles Carter: Thank you, Richard. We’ve obviously come off a challenging year with production just over 427,000 ounces. We lost almost 25,000 ounces due to the shaft incident at Stillwater Mine, which impacted the West Mine in particular. The average basket price declined 33% year-on-year to $1,243 an ounce. And we’re obviously very focused right now on a 2E basket price in the 900s, which means that we have to continue to both meet the new plan that we’ve put on the table and indeed move beyond it where we can with an ongoing focus on costs in particular. Importantly, we did significant restructuring late last year. We restructured the leadership team. We took out the CEO position with the GM’s reporting direct to Kevin Robertson.
We strengthened the central technical function in the [indiscernible] and we did a number of other streamlining adjustments to the leadership spans of control and accountabilities. More than adjusting the leadership team, we revised the mine plan significantly with a lower for longer production profile and we constrained near-term growth and deferred growth capital, knowing that we can come back at this as prices permit. We also did a workforce restructuring. We took out 270 contractors and 100 employees for a workforce reduction of around 16%. This was well executed by the teams. And I want to thank all employees for their responsible approach to this reality and in particular to the United Steelworkers for the professional manner in which they dealt with a difficult situation.
The revised plan is starting to see an estimated $400 an ounce benefit on all-in sustaining costs. We are continuing to work on ways to improve this with every cost element currently in focus. We have already seen a reduction in gross mining costs of around 19% over the past four months at Stillwater mine. And we’re starting to see a much better run rate with improved efficiencies at both mines. And most importantly, we are seeing a good safety start to the year. While 2023 was a tough year from a performance perspective, we completed a number of key infrastructure upgrades at both mines that will better position these operations for the future. At East Boulder mine, we completed the tunnel through rail upgrade and we commissioned a heat exchanger line for additional intake resolving a longstanding ventilation constraint at East Boulder.
At Stillwater mine, we commissioned the new mill at the start of this year and that is working well. We completed and commissioned the West Fork ventilation infrastructure, and there will be a major event changeover late in the second quarter going into the third quarter but that’s all looking good. And we did significant restructuring on the fleet. We removed 140 units to simplify and focus our maintenance efforts and our efficiency gains. At the MET complex, we completed the second furnace rebuild, and we’ll bring this back online once recycling volumes pick up. As you’ll see in the numbers, we had an all-in sustaining cost of $1,872 an ounce as seen in these results, which is mainly due to lower than planned production, increased ORD and sustaining capital expenditure.
In the detail of our earnings report, however, you will see that in the new mine plan, we have production marginally higher this year than last year. We have development rates maintained at around 25,000 meters for the year. We have total operating costs reducing by at least 18%, and we’re looking to go beyond that. We have ORD and sustaining CapEx reducing by between 55% and 60%, and we have project CapEx reducing by almost 70%. As I’ve noted, the growth capital is deferred for the next several years, but we will come back to that as we are able to. We are repositioning for profitability and sustainability to ensure delivery of a significant long-term value while cutting across right now to meet the challenges of markedly lower pricing. As I’ve noted, we’ve had a positive start through the first two months of 2024, and we’re working hard to keep improving our safety performance and to ensure that we achieve our production plan while continuing to dose every element of spend as we move forward.
I’m confident that we have the right plan for the times that we’re in and our real pride in the hard work underway by all team members who are affecting significant shift at our Montana operations. We are also doing significant activities off mine sites such as lobbying for the Inflation Reduction Act tax credit at the moment, the latest draft from the IRS really hands this credit only in final refiners. And we believe the original intent of legislators was that this should also impact critical minerals mining and not just processing. So that’s an ongoing lobbying effort. We’ll see where we get to. But I think importantly, what’s happening in the U.S. right now is that we need to ensure that we are safeguarding the competitiveness of an industry that is pivotal for American green metals production in the U.S. for the long-term future.
And to that end, any enabling legislation is helpful. Improved operating performance we are seeing at the start of this year is also being seen in slightly stronger recycling volumes through the first two months. As I hand over to Grant Stuart who will take you through the recycling performance, let me just echo what Neal has covered, and I’m excited by the potential of the Reldan transaction. In short, it has scope to broaden our recycling feeds beyond order cuts. It adds new metals to the character of our Americas business, and it strengthens our earnings and free cash flow capability going forward. Our U.S. metals recycling business is an important complement to our mining business, and we are working aggressively to develop a cost effective and highly leveraged platform for any future price upside while ensuring a competitive cost base that is sustainable beyond the current price squeeze.
