JOHANNESBURG (miningweekly.com) − Anglo Platinum (AngloPlat) is confident that its “prudent” capital expenditure (capex) model will be more than sufficient to ensure that the market is adequately supplied in 2011 and beyond, as well as to meet its aspiration of increasing the production of “low-cost” ounces.

The world’s largest producer of the precious metal, which is majority owned by diversified mining group Anglo American (Anglo), planned to invest up to R8-billion in 2011, compared with the R7,2-billion spent in 2010, on projects that it deemed most viable given current market needs.

CEO Neville Nicolau said that the company’s capital spend was directly related to its production growth plans for an additional 100 000 oz/y by 2013, and its planned ramp-up to 2,9-million ounces in 2019.

In the year to December 31, 2010, AngloPlat produced 2,57-million refined ounces and sold 2,52-million ounces. It planned to sell 2,6-million this year, with the additional ounces expected to be derived mainly from the Komani, Tumela and Mogalakwena mines, supplemented by fresh ounces from its new commissioned mine Unki, in Zimbabwe.

“This is a 2,5% to 3% growth over our current production levels, which is similar to the rate that we see platinum-group metals markets growing and also in line with anticipated world economic growth rates of around 3%,” he added.

Appropriate capital projects were “in place” to meet it growth targets, but "we want to bring on lower cost production, rather than higher cost ounces”.

RESTRUCTURING BENEFITS

The platinum miner embarked on an extensive restructuring programme in 2007 aimed at cutting costs, increasing production and improving safety. In the process, it cut about 18 000 jobs, mostly through natural attrition.

Through the plan, the company had been able to keep its production costs flat, cut capital spending and increase productivity by 23% since 2008. Its safety performance had also improved, with fatalities decreasing by 68% and its lost-time injury frequency rates falling 42%.

Speaking at the company’s results in Johannesburg, Anglo CEO Cynthia Carroll said that the group saw the benefit of the overhaul in its structures during its 2010 financial year, reporting better-than-expected production and an almost 600% increase in headline earnings to R4,9-billion.

She expected that the company would continue to reap the benefits of the restructuring during 2011, while Nicolau forecast that platinum prices would average at least $1 800/oz during the year.

The company also announced a multimillion broad-based black economic-empowerment ownership transaction, which it said was designed to promote long-term sustainable development in host communities around the Twickenham, Mogalakwena, Rustenburg and Amandelbult operations, and the miner’s key labour sending areas.
 

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