JOHANNESBURG (miningweekly.com) – Anglo Platinum was talking to its mining neighbours on farm-fence issues that were standing in the way of better mutual extraction, Anglo Platinum CEO Neville Nicolau said on Monday.

Nicolau told Mining Weekly Online in a video interview that in looking to extracting its orebodies efficiently, "we're talking to our neighbours where there are opportunities to extract better values between ourselves".

"This is quite important in terms of extracting the maximum value that we can from the Southern African platinum reserves.

"We're not looking to selling much more of our business. We think we have a pretty good portfolio. There are decisions that we have to make in terms of the shafts that we have closed down in the Rustenburg area, but there are no for-sale signs for major parts of our business at this point in time," he added.

Anglo Platinum would be spending R16-billion in capital in 2010 and 2011 on expansion projects and other projects that would add to the portfolio.

"There are two parts to capital. The first is that we need to maintain a production profile and we have aligned our capital expenditure directly to our long-term production profile," he added.

The tranches of R8-billion capital a year would keep production flat at 2,5-million platinum ounces in 2010 and at the exact same level in 2011, with some steady increase thereafter. The company produced just over 2,4-million ounces in 2009.

Of the R16-billion, R6-billion was stay-in-business capital that would be spent on maintenance.

There would be not only brownfield expansion, but also greenfield expansion.

Nicolau saw "huge" expansion opportunities in Zimbabwe, where Anglo Platinum had developed the Unki project, which will come into production at the end of 2010 and eventually ramp up to 65 000 oz a year.

"We certainly are looking at other opportunities in Zimbabwe, as we are in South Africa," he added.

Anglo Platinum was targeting a productivity level of 7 m² per total operating employee per month in 2010, rising to 7,3 m².

The company had reduced its overhead structure by 36% compared with July 2008, cutting 1 150 head office, management and overhead staff positions.

Since October 2008, a total of nearly 19 000 people have been stripped out of the organisation, many of them contractors, leaving a current personnel complement of 59 000.

Total personnel reductions, as well as technical processing innovations and electricity-consumption reductions had allowed the company to keep its unit costs flat.

"Keeping costs flat for one year is an outstanding achievement, but it's work in progress. It gets much more difficult the second year and even more difficult in the third year to maintain this performance," he added.

He foresaw a steady increase in demand in the market with the automotive and industrial sectors increasing over last year and jewellery possibly coming off.

"We see positive investment demand trends. Overall, we see demand for the metal increasing steadily and supply not reacting as quickly as what demand is growing," he added.

He said the market was heading from a balanced position to one of small 2010 deficit, with the deficit position remaining going forward.

"We think that the platinum price will be over $1 500/oz on average for this year," Nicolau said. The forecast on the palladium price was $400/oz.