JOHANNESBURG (miningweekly.com) – JSE-listed Anglo Platinum (Angloplat), which on Monday announced a 95% drop in headline earnings for the 2009 financial year, plans to raise R12,5-billion or $1,6-billion through a rights offer to repay long-term debt.

The platinum-miner’s gross debt stood at R22,8-billion at the end of December 31, 2009. Of this, R20,1-billion was outstanding under facilities provided by its parent group, Anglo American (Anglo), with the balance owed to banks.

The company, led by CEO Neville Nicolau, noted in a statement on Monday that it expected the rights offer to provide it with a more balanced capital structure, which would enable it to focus on extracting value from its existing operations, as well as from its growth projects.

Anglo said that it had undertaken to subscribe in full to its entitlement to its platinum subsidiary’s rights offer.

Angloplat’s headline earnings fell to R710-million for the year ended December 31, 2009, compared with R13,3-billion the year before, while revenues fell 28% to R36,9-billion, compared with R51,1-billion the year before.

The company noted in a statement to shareholders that the decline in headline earnings was mainly as a result of lower dollar platinum-group metals (PGMs) prices, with the dollar basket price per platinum ounce declining by 38% to $1 715/oz, compared with $2 764/oz in 2008.

The platinum-miner achieved its targeted production, with the total refined output rising 3% to 2,45-million ounces.

Refined platinum sales rose 16% to 2,57-million ounces, compared with 2,22-million ounces the year before.

Angloplat reported that the restructuring of its mining operations had been completed by the end of the year, with a new structure at its largest operations allowing it to achieve a sustainable reduction in the production unit costs.

MARKET CONDITIONS

Meanwhile, the platinum-miner noted that while demand for PGMs from the autocatalyst industry had remained constrained in the first half of the year, some rebuilding of inventories and widespread government incentive schemes had led to a firming in PGMs demand in the second half of the year.

Further, demand for platinum from the jewellery industry also improved, showing a 70% increase year-on-year in 2009.

The company pointed out that investor inflows into the platinum and palladium exchange-traded funds had continued strongly throughout 2009, with platinum holdings increasing by more than 380 000 oz and palladium by more than 506 000 oz.

Going forward, Angloplat was aiming to produce 2,5-million ounces during the 2010 financial year, adding that it expected the platinum market to return to a position of deficit, as a result of a moderate increase in supply and a significant recovery in demand.

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