JOHANNESBURG (miningweekly.com) − Safety stoppages, reduced face availability, an unprotected strike and flooding hampered Anglo American Platinum (Amplats), the world’s largest producer of the metal, during the first quarter, with year-on-year output falling by 5%.

Equivalent refined platinum ounces fell to 568 000 oz, which was also down 11% on the 640 000 oz produced during the previous quarter.

Production from the underground mines was mostly influenced by safety stoppages, owing to four fatalities experienced during the quarter. This resulted in Amplats having more safety stoppages, and consequently breaks in production, during the quarter, than the whole of last year.

Consequently, ounces mined at 433 400 oz was 12% lower than production achieved during the previous quarter and 6% lower than the same quarter last year.

During the reporting period, Amplats was able to partially make up for the deficit in underground production from the mining of surface materials. This saw the company increasing its refined platinum production by 19% to 533 000 oz, compared with the March quarter last year, but refined platinum production was down 39% from the December 2010 quarter.

Nevertheless, the miner said it was confident that it would refine and sell the target 2,6-million ounces during the year.

“Action plans are being implemented to make up the lost production from underground. The expected positive results from these plans will result in costs below R12 000/oz and higher productivity,” it added.

Amplats achieved a high average basket price during the March quarter at R21 384/oz, but prices treaded downwards to about R20 000/oz, as the rand strengthened. Despite this, the company said it expected prices would still be better than that of the previous year, which would result in improved earnings.

The miner predicted that the platinum price would continue at an average of at least $1 800/oz for the remainder of 2011, buttressed by a diesel share recovery in Europe, healthy jewellery sales and improved industrial demand.

“Much has been achieved over the past few years and much of this has led to permanent change in the group. The first quarter has been challenging, but the underlying trend is still intact and the company is busy addressing the problems. Recovery is under way,” Amplats assured.
 

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.