By Dineo Faku
JOHANNESBURG - ANGLO American Platinum (Amplats) upped its 2020 production and sales guidance yesterday after completing the repairs at its Anglo Converter Plant (ACP) Phase A unit at the Waterval smelter in Rustenburg ahead of schedule.
The share price Amplats, the platinum group metals (PGM) subsidiary owned by globally diversified mining giant Anglo American Platinum, jumped 5.29 percent on the JSE to R1 255.01 in intraday trade as the market cheered the news of the completion. Later in the day, the share closed at R1 247.62
Chief executive Natascha Viljoen told investors that the ACP Phase A unit was now in ramp-up and on track to be operating at full capacity by the end of the year.
“We were able to procure and deliver long lead-time items to site six months ahead of schedule, despite the impact of Covid-19 on supply chains, enabling us to bring forward the rebuild to the end of 2020, ahead of our initial expectations of the second quarter of 2021,” Viljoen said.
Amplats upgraded its refined production guidance for 2020 to between 2.6 million PGM ounces and 2.7 million PGM ounces, up from the previous estimate of 2.5 million PGM ounces.
Amplats also increased its sales volume guidance to 2.8 million PGM ounces, saying minor metal refined inventories had been drawn down.
The group said the release of the work-in-progress inventory built up in 2020 was expected to take up to two years.
The Phase A unit was damaged following an explosion within the converter in February, and Amplats had previously announced that it expected to complete the repairs by the end of the second quarter of 2021.
Viljoen said the first converter matte was now ready to be dispatched, allowing Amplats to re-establish the processing pipeline to finished metals.
“I am also pleased that our marketing team has worked tirelessly with our customers to mitigate the impact of the interruption and manage our contractual obligations during this period,” Viljoen said.
ACP’s operational challenges and the curtailed processing from South Africa due to the Covid-19 lockdown had contributed to the widening market deficit in 2020.
The World Platinum Investment Council projected in its latest report released last month that the platinum market would be in a significant deficit this year on the combination of supply losses due to pandemic-driven mine closures, ongoing South African processing disruption as well as strong investment demand, which more than offset lower Covid-19-impacted automotive, jewellery and industrial demand.
In March Amplats announced the temporary shutdown of the ACP after it detected water leaks in Phase B unit, which was commissioned to take over from phase A. The group said at the time that the water leaks posed a high risk of explosion and the company was determined that it had no other option, but to temporarily shut down the phase B unit.
As a result of the temporary closure of the entire ACP, Amplats had to declare force majeure to customers, suppliers of third-party purchase of concentrate and suppliers of tolling material.
Anchor Capital’s investment analyst, Seleho Tsatsi, said Amplats had a very difficult year operationally.
“It will be looking to get back to a normalised level of production in 2021,” Tsatsi said.