JOHANNESBURG - Anglo American Platinum (Amplats) lost 38000 ounces of platinum group metals (PGM) production last year as a result of load shedding.
Amplats said yesterday that the losses amounted to R742.3 million in revenue as a result of the power cuts that ripped through the economy in the latter part of 2019.
The group said the lost production would never be recovered.
Amplats declined 3.76 percent on the JSE yesterday to close at R1200.00.
Amplats, an Anglo American plc subsidiary, said its mines had lost 18000 PGM ounces of production due to power outages in the first half of the year, forcing operations to shut down, and a further 16800 in the second half, while joint ventures lost 3 200 ounces.
The group said its refining plants had not been spared, losing 74700 PGM ounces in the first quarter of 2019 and a further 70200 ounces in the fourth quarter.
“A load-shedding related event, resulting in a total power outage at the Rustenburg Processing facilities in December 2019, led to a further impact on refined production of 71100 PGM ounces, resulting in a total impact on refined production of 216000 PGM ounces for the year,” the group said.
Eskom blackouts are estimated to have cost the economy as much as R118 billion last year.
However, Amplats said that despite the outages, total PGM production from its managed mines had remained robust.
The group said higher production from all own managed operations had resulted in a 21percent increase in output to 675200 ounces, including a 22 percent jump in platinum production to 310000 ounces and a 20 percent increase in palladium production to 241000 ounces.
The mechanised Mogalakwena recorded a 24 percent increase in PGM production to 317500 ounces, due to an increase in built-up head grade, while Amandelbult jumped 25 percent to 238700 ounces, as the benefit from increased development at Dishaba lower mine had allowed increased productivity and production, it said.
Joint venture PGM production, excluding Mototolo, decreased 11 percent to 231200 ounces, including losses from Eskom power outages of 3200 PGM ounces. PGM production at Kroondal was down 8 percent due to the power outages and Modikwa, which it operates jointly with African Rainbow Minerals, eased 16 percent due to low equipment availability and section 54 safety stoppages.
Zimbabwe’s Unki reported a 5percent increase in PGM production at 52000 ounces due to improved concentrator throughput and mill run-time, partially offset by lower grade.
Load shedding resulted in South African chrome producers Samancor and Merafe Resources announcing plans to retrench employees, citing also a depressed price environment.
Seleho Tsatsi, an investment analyst at Anchor Capital, said Eskom’s power outages had dampened the economy. “The impacts on production of Eskom power outages was noteworthy. A further 20000 PGM ounces of production was affected due to power issues in the fourth quarter.
"It’s an unfortunate issue that management teams just have to deal with,” Tsatsi said, adding that the Amplats’ report was in line with expectations.
“That aside, there were no major surprises in the production report. Going forward, Amplats and the rest of the PGM sector will be looking to capitalize on currently high PGM prices,” said Tsatsi.