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AMS
ANANP
AMS - Anglo Platinum Limited - Anglo Platinum quarterly review and production
report for the period 1 July 2010 to 30 September 2010
ANGLO PLATINUM LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1946/022452/06)
Share code: AMS
ISIN: ZAE000013181
("Anglo Platinum")
ANGLO PLATINUM QUARTERLY REVIEW AND PRODUCTION REPORT FOR THE PERIOD 1 July 2010
TO 30 SEPTEMBER 2010
HIGHLIGHTS
- Continued improvement in safety performance with the LTIFR declining to
1.14 at the end of September from 1.20 as at the end of June (3Q2010 LTIFR
of 1.03)
- Refined platinum ounce production of 697 koz for the quarter, up 11% year
on year and 26% quarter on quarter, bringing the year-to-date September to
1.7m ounces
- Cash operating costs per equivalent refined platinum ounce of R11,647 for
the year to end September
- Productivity of 6.86mSquared per employee per month for the year-to-date
September
REVIEW OF THE QUARTER
SAFETY
Anglo Platinum continues to work towards achieving zero harm and is addressing
its overall safety performance as a top priority.
Anglo Platinum`s lost time frequency rate improved by 10% during the third
quarter of 2010, to 1.03 per 200,000 hours worked, down from 1.14 at the end of
the second quarter. A number of operations achieved significant fatality and
lost-time injury free milestones during the quarter.
Regrettably, two employees died at Anglo Platinum`s managed operations, during
the quarter, bringing the year-to-date total to 7 safety-related deaths. We
extend our sincere condolences to the families, friends and colleagues of the
deceased.
OPERATIONS
Production of equivalent refined platinum ounces from mining and purchase of
concentrate activities attributable to Anglo Platinum was 648 koz in the
quarter, an increase of 5% year on year or 32 koz above 617 koz produced in the
third quarter of 2009, and an increase of 8% or 47 koz above 601 koz produced in
the second quarter of 2010. The increase in production was largely driven by
growth in own mines` production, most notably Mogalakwena, Thembelani and Tumela
Mines. This increase was partly offset by lower purchases from third parties.
Mined production was 432 koz of platinum, up 10% year on year or some 38 koz
higher than the comparable period in 2009, and a rise of 16% or 59 koz above 373
koz produced in the second quarter of 2010. The 2009 third quarter production
results included 12 koz ounces from the two high-cost shafts (Brakspruit and
Boschfontein) that were placed onto care and maintenance in August 2009. The
increase in production from own mines (full margin ounces) reflects positively
on initiatives implemented to improve labour productivity and operational
flexibility and the effectiveness of measures implemented to deal with major
production challenges experienced during the first half of 2010.
Anglo Platinum`s 2010 year-to-date production was negatively impacted by a
number of unexpected events including the simultaneous intersection of five
major potholes at Khomanani mine; shaft haulage failures and safety stoppages at
Tumela mine; and at Union Mine, challenging geological conditions at Richard
shaft, plus the implementation of a new shift cycle, cleaning method and the
changeover to owner maintenance of equipment at the decline section; and the
milling of low grade surface material.
Purchased platinum ounces were 136 koz, up 1% year on year or some 700 ounces
higher than the 135 koz purchased during the third quarter of 2009, and down 4%
from 141 koz produced during the second quarter of 2010. The 2009 third quarter
production results included mined production (2 koz) from BRPM which in the 2010
period under review are reported as purchased concentrate following the
implementation of the transaction with the BRPM JV in December 2009.
Anglo Platinum produced 697 koz of refined platinum for the third quarter of
2010, 11% higher than the 629 koz produced in the same period in 2009 and 26%
higher than the 554 koz seen in the second quarter of 2010. Anglo Platinum
remains confident that it will meet its production target of 2.5m refined
platinum ounces for the full year 2010. Processing performances were in-line
with expectations.
In terms of productivity, the average output per operating employee per month
improved by 4% from 6.46mSquared in the third quarter of 2009 to 6.75mSquared in
the third quarter of 2010. Our target for 2010 remains an average of
7.0mSquared.
The year-to-date September 2010 cash operating cost per equivalent refined
platinum ounce achieved was R11,647, largely in line with our target despite
above inflation increases in wages (up 8.5% since 01 July 2010) and electricity
(up 25%). This will be the third year Anglo Platinum keeps unit cost increases
to below inflation and largely in line with R11k per ounce.
The cash on-mine cost per tonne milled decreased by 1% to R469 per tonne
compared with the third quarter 2009. Cash on-mine costs per tonne milled have
decreased in nominal terms since R475 per tonne in 2008.
Built-up head grades (4E) improved by 4% in the quarter under review to 3.18
grams per tonne from 3.05 grams per tonne in the second quarter of 2010. Anglo
Platinum expects grades to continue to recover during the fourth quarter of
2010.
CAPITAL PROJECTS AND BALANCE SHEET
Capital expenditure excluding interest capitalised was R1.9 billion for the
quarter. The Company continues to expect to incur around R8.0 billion of
capital expenditure for the year, excluding interest capitalised.
Net debt declined significantly from R18.6 billion at the end of the third
quarter of 2009 to R6.9 billion in the at the end of the third quarter 2010
following the cash inflow from the successfully completed rights issue in March
2010 and release of cash from working capital.
GUIDANCE FOR THE REMAINDER OF 2010
Market indications during the first nine months of 2010 support Anglo Platinum`s
expectation that the platinum market in 2010 will be in balance as a result of a
recovery in demand coupled with sluggish increase in supply.
Platinum demand remains firm as vehicle production continues to increase,
supporting an encouraging increase in vehicle sales. The consequent restocking
of autocatalyst metal inventory levels; metal inventory increases in industrial
applications; and firm jewellery and investment demand are sustaining the
platinum price well above Anglo Platinum`s average forecast for 2010 of $1,500
per ounce.
The South African Rand has, however, strengthened materially against the US
dollar throughout the year to date, with an average rate of R7.45 compared with
R8.56 in the first nine months of 2009. This strengthening has mitigated the
positive effects of rising dollar-based prices on the basket of platinum group
metals and by-products which we sell: the basket price averaged R18,324 per
platinum ounce sold in the first nine months of 2010, a rise of 34% compared
with the same period in 2009. In US dollar terms, however, the basket price
averaged $2,460 per platinum ounce sold in the year to September 2010, a rise of
54% year on year.
The third quarter 2010 Rand basket price achieved was R17,042 per platinum ounce
with the Rand at R7.24 to the US Dollar. If the Rand continues to strengthen
for a sustained period of time, Anglo Platinum`s revenue generation and cash
generation ability will be negatively impacted.
Anglo Platinum remains on track to achieve its production target of 2.5m refined
platinum ounces while achieving its productivity target of 7.0mSquared per
employee.
QUARTERLY PRODUCTION STATISTICS
Quarter ended
September September June
2010 2009 2010
Production
statistics
Tonnes mined - 000
opencast (see note 18,031 11,489 18,121
1)
Tonnes broken - 000
underground mines 6,969 8,417 7,102
Tonnes milled 000
11,503 10,972 10,845
Merensky / UG2 / per 1 1: 3.6: 3.2 1: 3.6: 2.6 1: 3.5: 3.2
Other tonnes (see Merensky
note 2) tonne
4E Built-up head g/tonne
grade milled 3.18 3.20 3.05
Mines
3.75 3.79 3.61
Mogalakwena open pit
mine 2.58 2.38 2.53
Western Limb
Tailings Retreatment 1.16 1.03 1.13
Equivalent refined 000 oz
platinum production
(see note 3)
Mined
517.9 483.3 460.3
Purchased
135.9 135.2 141.2
Sold
-5.5 -2.0 -0.5
Attributable to
Anglo American 648.3 616.5 601.0
Platinum
Total refined
production
Platinum 000 oz
697.0 629.2 553.8
Palladium 000 oz
404.5 337.5 294.4
Rhodium 000 oz
88.6 92.1 67.3
Gold 000 oz
21.6 25.7 21.5
PGMs 000 oz
1,350.3 1,211.2 1,034.4
Nickel 000
tonnes 4.3 5.5 4.8
Copper 000
tonnes 2.3 3.0 3.0
Pipeline stock
adjustment - - -34.0
Refined platinum 000 oz
production 697.0 629.2 553.8
Mining 000 oz
541.2 514.0 431.7
Purchase of 000 oz
concentrate 155.8 115.2 122.1
Platinum pipeline 000 oz
movement (48.7) (12.7) 13.2
Employees (Managed
operations: end of period -
exluding Bokoni)
Own enrolled
employees 48,444 49,148 49,183
Contractor employees
6,525 12,396 6,696
Total employees for
managed operations 54,969 61,544 55,879
M2 per total
operating employee 6.75 6.46 7.08
% Change
September September Q10
Q10 vs June Q10
vs September
Q09
Production
statistics
Tonnes mined - 000 57% 0%
opencast (see note
1)
Tonnes broken - 000 -17% -2%
underground mines
Tonnes milled 000 5% 6%
Merensky / UG2 / per 1
Other tonnes (see Merensky
note 2) tonne
4E Built-up head g/tonne -1% 4%
grade milled
Mines -1% 4%
Mogalakwena open pit 8% 2%
mine
Western Limb 13% 3%
Tailings Retreatment
Equivalent refined 000 oz
platinum production
(see note 3)
Mined 7% 13%
Purchased 1% -4%
Sold 175% 1000%
Attributable to 5% 8%
Anglo American
Platinum
Total refined
production
Platinum 000 oz 11% 26%
Palladium 000 oz 20% 37%
Rhodium 000 oz -4% 32%
Gold 000 oz -16% 0%
PGMs 000 oz 11% 31%
Nickel 000 -22% -10%
tonnes
Copper 000 -23% -23%
tonnes
Pipeline stock -100%
adjustment
Refined platinum 000 oz 11% 26%
production
Mining 000 oz 5% 25%
Purchase of 000 oz 35% 28%
concentrate
Platinum pipeline 000 oz
movement
Employees (Managed
operations: end of period -
excluding Bokoni)
Own enrolled -1% -2%
employees
Contractor employees -47% -3%
Total employees for -11% -2%
managed operations
M2 per total 4% -5%
operating employee
Notes:
1. Includes Mogalakwena, Kroondal and Marikana opencast operations
2. Other tonnes includes both Platreef and other surface sources
3. Mine`s production converted to equivalent refined production using Anglo
American Platinum`s standard smelting and refining recoveries
Johannesburg, South Africa
21 October 2010
For further information, please contact:
Anna Mulholland
+27 (0) 11 373 6683
amulholland@angloplat.com
Kgapu Mphahlele
+27 (0) 11 373 6239
kmphahlele@angloplat.com
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 21/10/2010 08:00:01 Produced by the JSE SENS Department.
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