File photo: Anglo American Platinum website
File photo: Anglo American Platinum website

Amplats' production capacity near normal levels

By Dineo Faku Time of article published Oct 23, 2020

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JOHANNESBURG - Anglo American Platinum (Amplats), the world’s second-biggest platinum producer, said yesterday that production capacity was near normal levels in the September quarter and refined Platinum Group Metals (PGM) production continued to be disrupted by water leaks.

“From a production perspective, we have managed to reach 94percent of normal capacity by the end of the quarter from our own-managed mines, with Mogalakwena, Unki and Mototolo delivering strong performances, Amplats chief executive Natascha Viljoen said.

However, the group said interruptions at the Anglo Converter Plant (ACP) unit had resulted in a 14percent decline in output of 1.02million ounces, with refined platinum production decreasing by 13percent to 503800 ounces and refined palladium production decreasing by 2percent to 354100 ounces.

The ACP Phase B unit was recommissioned following an explosion at the ACP Phase A unit in February and grappled with reliability issues, the company said. Amplats said the monitoring of the stability of the ACP Phase B unit had resulted in disruptions.

“Due to these proactive measures, water leak repairs, essential maintenance, testing and monitoring was conducted at the ACP Phase B, production was disrupted for 20 days during the quarter,” said the group.

Amplats said refined PGM production in the final quarter was highly dependent on the ongoing stability of Phase B until a controlled switch-over to Phase A was completed.

As a result, the group remained cautious about refined output in the fourth quarter of 2020 and had revised PGM refined guidance to the lower end of its previous guidance to between 3.1million to 3.3million PGM ounces. “If the ACP Phase B unit creates a material risk to employees or assets by continuing to operate, the company will proactively conduct a safe shut-down, taking Phase B offline until the recommissioning of Phase A,” said Viljoen.

PGM sales volumes from production decreased by 16 percent to 884900 ounces in line with lower refined production and the rebuild of some refined inventory.

“Due to the slight increase in work-in-progress inventory and the rebuild of refined inventory, sales volumes are expected to be lower than metal-in-concentrate production in the second half of 2020,” said the group.

Total PGM production of 1.1million ounces was down 2percent against the prior year, largely due to lower production predominantly from the joint operations of Modikwa and Kroondal, as well as lower production from Amandelbult.

PGM sales volume from trading increased 210percent to 341000 ounces. The total PGMs guidance for 2020 was revised to the upper end of the previous guidance to between 3.6million ounces to 3.8million ounces from between 3.1million ounces to 3.6million ounces.

The group said two employees died on duty during the quarter.

Investment analyst at Anchor Capital Seleho Tsatsi said September was a difficult quarter for the company in terms of safety.

Amplats shares fell 2.32 percent to R1351.73 on the JSE yesterday.

BUSINESS REPORT

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