JOHANNESBURG (miningweekly.com) – The world’s largest platinum company Anglo Platinum on Wednesday opted for reductions in both capital expenditure (capex) and production and lay low on making any retrenchment pronouncements.

In reviewing its programme in the light of the “unprecedented” market downturn, the JSE-listed Anglo American company said that it would restrict its 2009 capex to R9,1-billion, retain its 2008 2,4-million-oz production target in 2009, and, by implication, keep all of its people.

But there were “assumed” aspects to both the 2009 capex and production cuts  by the company, still in its first year under new CEO Neville Nicolau.

This was because Anglo Platinum had never published official 2009 capex and production figures, but on the basis of “assumptions”, 2009 capex had been cut by 30% and production by 12,5%.

The market had “assumed” that its 2009 capex would be at least at the same R13-billion level of 2008, and, by the same token, that 2009 production would be 2,7-million oz, 300 000 oz above the 2008 target of 2,4-million oz.

The increased production was regarded as “a given” by some analysts because of  particular 2008 production impacts that were unlikely to be repeated, including mine flooding.

Although the 2,4-million oz production figure appears to be a production standstill, it it represents a market-perceived cutback.

“Anglo Platinum had not published a capex target for 2009 but indications were that the level would be similar to that in 2008 of R13-billion,” as the company’s investor relations head Trevor Raymond explained to Mining Weekly Online.

Raymond said that it could thus be “assumed” that the capex reduction was from R13-billion to R9,1-billion.

He added that the same applied to the 2,4-million oz “assumed” by the market to be 2,7-million in 2009.

Anglo Platinum said in Wednesday’s capex-review announcement that it intended delaying expenditure at the Amandelbult No 4 shaft project, the Twickenham project, the Styldrift project, the second slag cleaning furnace project at Waterval and “numerous” smaller projects.

It had opted to respond to the challenges that faced the platinum industry on “an ongoing basis”.

Anglo Platinum said that it planned to maintain production at 2,4 million ounces of refined platinum in 2009 and to spend R9,1-billion.

It had completed a review of its capital expenditure programme in response to “unprecedented” rapid declines in platinum group metal (PGM) prices caused by a “considerable” slowing of vehicle sales in North America, Europe and Japan having a negative effect on forecast consumption of PGMs for autocatalysis.

It had completed its annual planning process that included the evaluation of a number of initiatives to reduce costs and improve operational productivity.

It had also undertaken a critical examination of short-term supply-and-demand trends.                                                      

It would continue to monitor its production levels against global economic developments and would provide further updates on its production plans at     appropriate intervals.                                                         

The company expected to announce its full-year results to December 31 on February 9.