Amplats says that it's on course to meet annual output of more than 4m ounces
Anglo American Platinum (Amplats), the world’s biggest platinum producer, said yesterday that it was still on course to meet its full year output guidance of more than 4 million ounces.
For the second quarter, its platinum-group metals (PGM) output increased by 1 percent to 1.12 million ounces.
The group said that it was confident it would achieve its targets.
“PGM production outlook for 2019 is maintained at between 4.2 to 4.5 million ounces, including platinum production of between 2 to 2.1 million ounces and palladium production guidance of between 1.3 to 1.4 million ounces,” Amplats said.
“As previously communicated, production guidance is down on 2018, due to the transition of Sibanye-Stillwater Rustenburg mine 4E material to a tolling arrangement,” the company said.
Amplats in June said that it expected first-half net income to almost triple to at least R6.1 billion on higher prices for for PGMs.
Platinum prices have increased more than 2 percent this year, while palladium prices have more than doubled over the past three years. Rhodium prices have also edged up, giving PGM producers a boost so far this year.
Johnson Matthey said in its latest PGM market report that the release of pipeline stocks should lift South African supplies by 2 percent, assuming no production disruption occurred.
“The steep climb in the palladium price since August 2018 has led some investors to conclude that platinum appears under-priced, in view of its potential to substitute for palladium in automotive applications in future,” Johnson Matthey said.
“At the same time, the outlook for PGM mining in South Africa is increasingly uncertain, with producers facing steep increases in electricity prices, periodic disruption to power supplies and a risk of industrial action during forthcoming wage negotiations.”
The increase in PGM prices and bumper profits forecasts have seen trade union smelling blood and asking for higher salary increases for their members. South Africa’s major mining houses and trade unions entered into wage negotiations last week.
The Association of Mineworkers and Construction Union (Amcu) presented its demands to Amplats, Impala Platinum and Sibanye-Stillwater. Amcu is the largest union in platinum sector is demanding a monthly minimum basic pay of R17000 for its members, equivalent to an increase of around 50 percent. The rival National Union of Mineworkers in turn, is calling for a rise of 15 percent.