JOHANNESBURG (miningweekly.com) – Anglo American Platinum (Amplats) remains on track to achieve its refined production and sales target of 2.6-million platinum ounces for 2011, but said its unit full-year costs would be higher.
The miner revised its cost target for 2011 to R12 900 an equivalent refined platinum ounce, after electricity price hikes and higher-than-expected increases in wages and consumables, such as steel, explosives, tyres and diesel, pushed up unit costs 10% in the first nine months of the year.
The South African producer revised its unit cost target from a previous guidance of between R12 400 and R12 600 an equivalent refined platinum ounce.
While cash operating costs for January to September rose to R13 093 an ounce, Amplats stated that volume increases, remedial actions to improve safety and labour productivity would bring down unit costs in the fourth quarter to R12 250 an ounce, which is in line with the second-half target of R12 000 an equivalent refined platinum ounce.
The miner increased its third-quarter equivalent refined platinum production to 666 800 oz, which is a 13% increase on the second-quarter output and a 3% year-on-year improvement.
Third-quarter refined output decreased by 7% year-on-year to 646 500 oz, despite higher output from mining operations due to an increase in pipeline stocks. With year-to-date refined production at 1.82-million ounces, Amplats needs to produce about 780 000 oz in the final three months to meet its full-year target.
The world’s biggest platinum producer said it expects the market to be in balance in 2011, with the recovery in demand met by a sluggish increase in supply.
“Although autocatalytic and other industrial demand for platinum remains threatened by concerns of a double dip recession in Europe and North America, it is believed that the strengthening of jewellery and exchange-traded fund demand are likely to support that platinum price,” the Anglo American subsidiary said.
Amplats achieved an average dollar basket price of $2 733/oz in the third quarter, which was a 17% improvement on the price achieved in the same three-month period last year, but 3% down on that of the second quarter on the back of European and North American double-dip recession concerns.