Platinum producer Anglo Platinum (Angloplat) revealed in its latest financial results that it is maintaining its full-year output forecast of 2,4-million ounces, with the potential to reach 2,6- million ounces during the second half of 2009 in the right market conditions.

Angloplat CEO Neville Nicolau says that the potential can be reached owing to the company’s mining production forecast, process pipeline stocks and high smelter availability.

The company revealed at the end of July that its refined platinum production increased by 6% on a year-on-year basis during the first half of 2009, and that output during the six months was 1,05-million ounces, despite the challenging economic environment.

Angloplat also revealed that its first- half profit dropped by 68% to R2,66-billion from 12 months earlier, mainly as a result of significantly lower metal prices, rather than a lack of demand.

The price of platinum ave- raged $1 102/oz between January and June, 44% lower than the corresponding period in 2008, when it hit a record $2 230/oz in March.

Delayed Projects
Angloplat has received a R7,1-billion boost in its available funds thanks to an injection from parent company Anglo American.
“The group should be able to operate within the level of its facilities for the next twelve months,” it said in a statement.

However, Angloplat decided to delay capital expenditure on five projects projected at R32-billion, while it considers its financial position in the face of economic hardships.

Originally projected to cost R16-billion, the development of the No 4 shaft at Amandelbult is the most significant work to be put on hold, for a total of four years. The R7,1-billion Twickenham platinum mine has been delayed by two years, while the R6,1-billion Styldrift Merensky Phase One project will be put on ice for 18 months.

Further, Angloplat has confirmed that it will delay construction of a R1,9-billion base metals refinery and the R1-billion No 2 slag furnace cleaning project by a year.

However, Angloplat is still continuing to develop six projects to the value of R9,8-billion.

More Shafts Closing
Despite continuing projects, Angloplat had identified production that was unlikely to pass the profit test in the medium term. The company could see its production was affected after revealing that it is considering putting two further shafts at its Rustenburg mine on care-and-maintenance.

The company already closed down the Blesbok shaft earlier this year. Nicolau confirmed that the company may now follow suit with another two shafts, at a potential loss of 140 000 oz of high-cost production.

Nicolau says that care-and-maintenance efforts will improve the cost of the Rustenburg mines and, in time, will move them from the fourth quartile to the third quartile on the cost curve. He added that the company is looking to fix, shut down or sell high-cost shafts, which are likely to impact on the company’s earning potential in the current economic environment.

“They’re put on care-and-maintenance with the idea that, if the market circumstances do change, we’ll be able to recreate those job opportunities,” Nicolau told Mining Weekly.

Job Losses
Since the end of the third quarter of 2008, Angloplat had reduced its 80 000-plus staff complement by 11 931 people, to below 70 000 people.

“This action has been necessary to ensure that we survive the short term and we are reviewing the financial situation of all of our mines, particularly the Rustenburg mines, which may lead to further labour reductions this year,” Nicolau said.

He added that he expects platinum prices to move higher in the second half of 2009, supported by sustained jewellery and investment demand and a rise in output of vehicles using platinum-group metals based catalytic converters.

Angloplat’s operations incorporate 11 mines, six joint ventures, 20 concentrators, three smelters, a base metals refinery and a precious metals refinery.

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