Amplats to hike output by 20% in 10 years
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JOHANNESBURG - ANGLO American Platinum (Amplats) yesterday unveiled a 10-year strategy to steadily expand output by 20 percent as net sales revenue surged during the year ended December 2020, despite being rocked by disruptions at the Anglo Converter Plant (ACP).
Amplats, owned by Anglo American, said it would return value to shareholders and investors through increasing attributable production from its mines and joint venture operations to 3.6 million ounces in 2030 from 3 million ounces today.
This was despite the winding down of the Kroondal mine, its joint-venture operation with Sibanye-Stillwater, in the North West.
Chief financial officer Craig Miller said the company was anticipating a 10 percent productivity improvement at the flagship open-pit mine, Mogalakwena, in Limpopo.
“Mogalakwena produced 1.2 million ounces last year, the 10 percent improvement will take us to 1.3 million ounces.
“We have got the potential coming through from an expansion in terms of the options we are looking for an additional 300 000 ounces to 600 000 ounces which therefore contributes to the 3.6 million ounces,” said Miller.
Chief executive Natascha Viljoen said the group was exploring options for the future of Mogalakwena.
“We are mitigating for the impact of a potentially mega pit and that mitigation is coming in the form of exploring underground potential,” said Viljoen.
Viljoen also said the group would be taking a decision at the end of the year on Mogalakwena's optimised mine plan.
The group reported a 38 percent increase in net sales revenue to R137.8 billion during the year ended December 2020, compared to R99.6bn a year earlier, due to the strong platinum group metals (PGM) price environment.
Amplats said the stronger PGM prices and higher sales from trading activities had helped to cushion the impact of refined PGM production, following several glitches at ACP.
Cash flush Amplats declared a R9.4bn, or R35.35 per share, final dividend, based on a 40 percent headline earnings pay-out ratio.
Anchor Capital investment analyst Seleho Tsatsi said Amplats' trading business was able to help offset the impact of its converter issues that it had over the course of the year.
“Amplats is in a very comfortable financial position with nearly R20bn of net cash. Volumes should pick up this year.
“The company is guiding for roughly an 83 percent increase in refined platinum production.
“That, plus PGM pricing which continues to be strong, should be supportive for earnings growth in 2021,” said Tsatsi.
The group committed to the base dividend of 40 percent payout of headline earnings as part of its plan to deliver shareholder value..
Amplats shares closed 1.52 percent higher at R1779.05 on the JSE yesterday.