Amplats mines will mechanise

07/05/2010 Mark Cutifani CEO of AngloGold Ashanti presenting their first quarter results at their offices in JHB. (176) Photo: Leon N icholas

07/05/2010 Mark Cutifani CEO of AngloGold Ashanti presenting their first quarter results at their offices in JHB. (176) Photo: Leon N icholas

Published Apr 25, 2014


Johannesburg - Anglo American Platinum (Amplats) must mechanise its mines in the long term, Anglo American chief executive Mark Cutifani said yesterday.

Speaking at the company’s annual general meeting in London amid a three-month strike that has disrupted production on the platinum belt, Cutifani said he saw the transition taking between five and 10 years, Bloomberg reported. The company must be sensitive to social impacts caused by the changes to mining methods, he stressed.

The group was seeking an outcome to the strike “to make all sides happy”.

Anglo chairman John Parker said the platinum sector was “fragile” and at risk of long-term damage from the strike.

Amplats chief executive Chris Griffith told the meeting that the company could not accept a short-term solution that got miners back to work with pay rises that affected the country’s whole mining industry.

This comes as Anglo posted an increase in its copper and iron ore production in the first quarter while output slumped at its separately listed platinum subsidiary.

Due to the strike, production at Amplats, the world’s biggest platinum producer, declined by 39 percent in the first quarter, prompting it to revise its full-year production guidance .

“In respect of the outlook for 2014 as a whole and taking into account the production lost to date, full-year production is expected to reduce to approximately 2.1 million ounces, with potential for further downside revisions from the ongoing industrial action,” the company said in its quarterly review yesterday.

Previously Amplats expected to produce between 2.3 million and 2.4 million ounces. In the first quarter, 185 000 ounces of platinum production was lost from all operations due to the strike. Production at its Rustenburg, Amandelbult and Union mines, which are most affected by the strike, declined by 84 percent, 75 percent and 86 percent, respectively.

The Mogalakwena mine in Limpopo and the Unki mine in Zimbabwe were unaffected. Production at Mogalakwena grew by 3 percent and Unki lifted output by 4 percent.

In addition, the impact of placing the Khomanani mines, Khuseleka shaft 2 and Union North mine on long-term care and maintenance in August last year resulted in a decrease in production of 43 000 ounces. About 6 000 mining and processing jobs were affected at the mothballed operations, which were shut to cut costs.

“We think that Amplats’s first-quarter production report exceeded expectations and reflects the company’s geographical diversity and flexibility amid a crippling strike by the Association of Mineworkers and Construction Union (Amcu),” said Abdul Davids, the head of research at Kagiso Asset Management. The company’s “production statistics from its own mines, which reflect a more than 50 percent decline in production, represents a fairer reflection of the strike’s impact on the industry”.

Amplats has about 60 percent of its operations running, while Impala Platinum is operating at 40 percent and Lonmin has zero production.

“Unlike Amplats, Lonmin and Impala have seen a bigger impact on production from the strike and therefore we would expect a downward revision in guidance when the strike ends,” Davids said.

Production improved at Amplats’s joint ventures, which were largely not affected by the strike, with the exception of Modikwa, which is operated in conjunction with African Rainbow Minerals.

Modikwa experienced a one-week strike before a new agreement was reached with the National Union of Mineworkers.

Production from joint ventures and associates increased by 5 percent to 183 000 ounces.

Anglo’s iron ore output increased by 10 percent to 11.3 million tons.

Copper production rose 18 percent from the same period last year to 202 000 ounces. - Business Report

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