| Thu 20 Oct 2011, 8:00 | | AMS - Anglo American Platinum Limited - Anglo American Platinum Limited |
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AMS
ANANP
AMS - Anglo American Platinum Limited - Anglo American Platinum Limited
(Amplats) quarterly review and production report for the period 1 July
2011 to 30 September 2011
ANGLO AMERICAN PLATINUM LIMITED
(PREVIOUSLY ANGLO PLATINUM LIMITED)
INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA
REGISTRATION NUMBER 1946/022452/06
SHARE CODE: AMS
ISIN: ZAE000013181
ANGLO AMERICAN PLATINUM LIMITED (AMPLATS) QUARTERLY REVIEW AND PRODUCTION
REPORT FOR THE PERIOD 1 JULY 2011 TO 30 SEPTEMBER 2011
KEY FEATURES
- Regrettably, two employees lost their lives during the third quarter
of 2011
- Equivalent refined platinum production up 3% year on year and 13%
quarter on quarter to 667 koz
- Productivity of 6.82mSquared per employee per month during the third
quarter, up 15% quarter on quarter
- Cash operating costs per equivalent refined platinum ounce of
R13,093 for the year to date September
REVIEW OF THE QUARTER
SAFETY
Amplats continues to work towards achieving zero harm and is addressing
its overall safety performance as a top priority. We continue to engage
with our stakeholders from Labour Unions and the Department of Minerals
Resources, as we remain committed to, and supportive of, all safety
improvement initiatives. Although we experienced safety stoppages during
the quarter under review, achieving `zero harm` remains a top priority.
Amplats` lost time injury frequency rate improved by 3% during the third
quarter of 2011 to 1.28 per 200,000 hours worked, down from 1.32 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 lost their lives at Amplats` managed
operations, during the quarter, bringing the year-to-date September total
to 10 deaths. We extend our sincere condolences to the family, friends
and colleagues of the deceased.
OPERATIONS
The equivalent refined platinum production (equivalent ounces are mined
ounces expressed as refined ounces) for the third quarter of 2011
increased by 3% year on year. The equivalent refined platinum production
for the first nine months of 2011 was 1.83 moz, in line with the 1.84 moz
produced in the same period in 2010.
Mined production of 514 koz was in line with production during the same
period in 2010. Production at most underground operations was impacted by
an increased number of safety related stoppages (S54s) compared to the
same period in 2010. 14 such stoppages occurred during the quarter and
Amplats is engaging proactively with Labour Unions and the Department of
Minerals Resources to implement more effective means of addressing major
risks. This was partly offset by better than expected production ramp up
at Mogalakwena`s North pit and Unki mine. The production ramp up of Unki
is running ahead of schedule and the mine is expected to reach steady
state in 2012, which is a year ahead of schedule.
Purchased platinum ounces were 154 koz, up 14% when compared to the third
quarter of 2010 due to increased production volumes at the Modikwa and
Bokoni mines. Modikwa`s production increased mainly due to higher
contribution from open cast mining. Bokoni mine`s production benefitted
from the restructuring initiatives which were implemented in March 2011.
Refined platinum production decreased by 7% year on year despite higher
output from mining operations due to an increase in pipeline stocks.
Refined platinum production for the year to date September 2011 was 1.82
moz, an increase of 7% from the 1.70 moz produced in the same period in
2010.
The overall 4E built-up head grade for the third quarter of 2011 was
3.35g/t compared to 3.28g/t in the same period in 2010, underpinned by
higher head grade from platreef (Mogalakwena mine) and surface production
sources. The 4E built-up head grade for Mogalakwena mine and surface
sources increased by 15% and 11% year on year respectively. Overall, the
Merensky head grade declined by 9% year on year while the UG2 head grade
was unchanged over the same period. The overall grade was impacted
positively by the increased milling of MSZ reef (Unki mine). The 4E built-
up head grade for Unki mine is 3.80g/t, compared to group average of
3.35g/t.
Productivity (average output per operating employee per month) improved
by 15% from 5.95mSquared in the second quarter of 2011 to 6.82mSquared in
the third quarter of 2011. Labour productivity was largely flat year on
year, despite the higher number safety related stoppages experienced
during the quarter. The labour productivity target for 2011 remains an
average of 6.6mSquared.
COSTS
The cash operating cost per equivalent refined platinum ounce was R13,093
in the nine months to September 2011, up 10% year on year due to higher
than expected increases in the cost of consumables (steel up 18% YTD,
explosives up 19%, tyres up 22%, diesel up 22%, re-agents up 32% and
caustic soda up 37%) and wages (up by between 8.5% and 10% from 01 July
2011); and lower than projected production volume from managed
underground mines. Production from managed underground mines declined by
2% year on year during the first nine months of the year mainly due to a
higher number of safety related stoppages. The cash on-mine cost per
tonne milled for year-to-date September 2011 increased by 10% year on
year to R509 per tonne. Cash on-mine costs per tonne milled have
increased by a compound annual growth rate of 2% from R475 per tonne
since the implementation of our restructuring programme in 2008.
REALISED BASKET PRICE
The average US dollar basket price achieved during the third quarter of
2011 was US$2,733 per platinum ounce, up 17% year on year but down 3%
quarter on quarter influenced by concerns about a double dip recession in
Europe and North America. The South African Rand has, however, weakened
against the US dollar during the third quarter of 2011, with an average
rate of R7.29 compared with R6.76 in the second quarter of 2011. The rand
exchange rate moved from R6.73 at the beginning of the third quarter to
R8.15 at the end of the quarter. This weakening reduced the negative
effects of falling dollar-based prices of the basket of platinum group
metals and by-products sold; the basket price averaged R19,512 per
platinum ounce sold in the third quarter of 2011, a rise of 14% compared
with the same period in 2010. The average Rand basket price achieved
during the first nine months of 2011 increased 9% year on year to R19,963
per platinum ounce.
CAPITAL PROJECTS AND BALANCE SHEET
Capital expenditure, excluding capitalised interest, was R1.76 billion
for the quarter. The Company continues to expect to incur around R7.3
billion of capital expenditure for the year, excluding capitalised
interest.
Net debt declined from R6.9 billion at the end of the third quarter of
2010 to R4.8 billion at the end of the third quarter 2011 due to improved
cash generation by operations, underpinned by a higher basket price.
GUIDANCE FOR THE REMAINDER OF 2011
Market indications during the first nine months of 2011 support Amplats`
expectation that the platinum market in 2011 will be in balance as a
result of strong demand in the autocatalyst, other industrial and ETF
segments during the first half of the year and the sustained
strengthening of the jewellery segment, particularly in China, during the
second half of 2011. The recovery in demand is expected to be met by the
sluggish increase in supply.
Although autocatalytic and other industrial demand for platinum remains
threatened by concerns of a double dip recession in Europe and North
America, it is believed that the strengthening jewellery and ETF demand
are likely to support the platinum price.
Amplats remains on track to achieve its refined production and sales
volume target of 2.6m platinum ounces while achieving its productivity
target of 6.6mSquared per employee.
Cash operating costs increased by 10% to R13,093 per equivalent refined
platinum ounce during the first nine months of 2011, mainly due to higher
stores and consumables, labour and electricity costs.
Expected higher production volumes from underground sources, remedial
actions implemented to improve safety performance and improving labour
productivity is expected to reduce unit costs in the fourth quarter of
the year to around R12,250 per equivalent refined platinum ounce.
Although this is largely in line with the target for the second half of
2011 of R12,000, the average cash operating cost of R13,093 per
equivalent refined platinum ounce seen in the first nine months of 2011
implies a higher than expected unit cost for the current financial year.
Unit cost target for 2011 has therefore been revised to approximately
R12,900 per equivalent refined platinum ounce.
QUARTERLY PRODUCTION STATISTICS
Quarter ended
September September June
2011 2010 2011
Production statistics
Tonnes mined - 000 20,149 18,031 17,974
opencast (see note 1)
Tonnes broken - 000 7,161 6,969 6,361
underground mines
Tonnes milled 000 10,920 11,154 10,388
Merensky / UG2 / per 1 1: 3.9: 3.6 1: 3.6: 3.2 1: 4.0: 4.6
Other tonnes (see Merensky
note 2) tonne
4E Built-up head g/tonne 3.35 3.28 3.19
grade milled
Merensky reef 4.98 5.48 5.00
UG2 reef 3.90 3.90 3.76
Platreef (Mogalakwena 2.96 2.58 3.01
Mine)
MSZ reef (Unki Mine) 3.80 3.69
Surface sources 1.24 1.12 1.18
including WLTR
Equivalent refined 000 oz
platinum production
(see note 3)
Mined 513.7 517.9 452.8
Purchased 154.3 135.9 142.3
Sold -1.2 -5.5 -2.5
Attributable to Anglo 666.8 648.3 592.6
American Platinum
Total refined
production
Platinum 000 oz 646.5 697.0 640.7
Palladium 000 oz 375.9 404.5 373.8
Rhodium 000 oz 75.2 88.6 79.9
Gold 000 oz 17.1 21.6 31.5
PGMs 000 oz 1,234.8 1,350.3 1,244.0
Nickel 000 4.9 4.3 5.5
tonnes
Copper 000 3.0 2.3 3.3
tonnes
Pipeline stock - - 35.5
adjustment
Refined platinum 000 oz 646.6 697.0 640.7
production
Mining 000 oz 490.4 541.2 482.2
Purchase of 000 oz 156.2 155.8 158.5
concentrate
Platinum pipeline 000 oz 20.2 (48.7) (12.6)
movement
Employees (Managed
operations: end of
period)
Own enrolled 51,950 48,497 50,727
employees
Contractor employees 6,305 6,442 6,380
Total employees for 58,255 54,939 57,107
managed operations
mSquared per total 6.82 6.86 5.95
operating employee
QUARTERLY PRODUCTION STATISTICS
% Change
Sept `11 Sept `11
vs Sept vs June
`10 `11
Production statistics
Tonnes mined - opencast 000 12% 12%
(see note 1)
Tonnes broken - 000 3% 13%
underground mines
Tonnes milled 000 -2% 5%
Merensky / UG2 / Other per 1
tonnes (see note 2) Merensky
tonne
4E Built-up head grade g/tonne 2% 5%
milled
Merensky reef -9% 0%
UG2 reef 0% 4%
Platreef (Mogalakwena 15% -2%
Mine)
MSZ reef (Unki Mine) 3%
Surface sources including 11% 5%
WLTR
Equivalent refined 000 oz
platinum production (see
note 3)
Mined -1% 13%
Purchased 14% 8%
Sold -78% -52%
Attributable to Anglo 3% 13%
American Platinum
Total refined production
Platinum 000 oz -7% 1%
Palladium 000 oz -7% 1%
Rhodium 000 oz -15% -6%
Gold 000 oz -21% -46%
PGMs 000 oz -9% -1%
Nickel 000 tonnes 14% -11%
Copper 000 tonnes 30% -9%
Pipeline stock adjustment -100%
Refined platinum 000 oz -7% 1%
production
Mining 000 oz -9% 2%
Purchase of concentrate 000 oz 0% -1%
Platinum pipeline 000 oz
movement
Employees (Managed
operations: end of
period)
Own enrolled employees 7% 2%
Contractor employees -2% -1%
Total employees for 6% 2%
managed operations
mSquared per total -1% 15%
operating employee
Notes:
1. Includes Mogalakwena, Modikwa, Kroondal and Marikana opencast
operations. Marikana opencast operations closed in April 2011.
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
20 October 2011
For further information, please contact:
Kgapu Mphahlele
+27 (0) 11 373 6239
kmphahlele@angloplat.com
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 20/10/2011 08:00:58 Produced by the JSE SENS Department.
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