Anglo American Platinum continues with rebuild of Polokwane smelter

Anglo American Platinum in its PGMs Production Report for the first quarter ending 31 March 2022 said total PGMs production (expressed as 5E+Au metal-in-concentrate) decreased 6% to 956,000 ounces.

Own-managed mines PGMs production of 529,200 ounces decreased by 11% primarily due to lower production from Mogalakwena which was impacted by heavy rainfall and redirected mining into lower-grade areas, and Covid-19 impacting delivery of equipment, partially offset by improved performances at Amandelbult, Mototolo and Unki.

Refined PGMs production (owned production, excluding tolling) decreased by 26% to 718,500 ounces due to more normalised throughput, as Q1 2021 benefited from higher-than-normal work-in-progress inventory following the ACP Phase A rebuild and commissioning in Q4 2020.

PGMs sales volumes (from production, excluding sales from trading) decreased by 26% to 838,200 ounces in line with lower refined production.

Revised 2022 guidance – metal-in-concentrate production revised to between 3.9 – 4.3 million PGM ounces (previously 4.1 – 4.5 million PGM ounces), refined production revised to between 4.0 – 4.4 million PGM ounces (previously 4.2 – 4.6 million PGM ounces) and unit cost per PGM ounce produced revised to R14,000 – R15,000 per PGM ounce (previously R13,800 – R14,500 per PGM ounce).

Natascha Viljoen, CEO of Anglo American Platinum, said: “Whilst seasonally Q1 is generally a lower production quarter, as employees complete medical onboarding following the December break, we saw total PGM production decrease by 6%. The severe rainfall across South Africa in the first quarter impacted mining activity at Mogalakwena, leading to mining activity being redirected to lower grade areas, as well as utilising low-grade ore stockpiles to offset this headwind. This was partially offset by improved performances at Amandelbult, Mototolo and Unki. We continue to feel the impact of Covid-19, with supply chain disruptions impacting delivery of heavy mining equipment (HME), delaying our ability to drill and develop at Mogalakwena.

Refined PGM production decreased by 26% to 718,500 PGM ounces, to a more normalised level of throughput, as Q1 2021 benefited from higher-than-normal work-in-progress inventory following the ACP Phase A rebuild and commissioning in Q4 2020.

In addition, planned annual maintenance and the annual stock count resulted in additional downtime of processing assets in Q1 2022. Sales volumes were lower in line with refined production. We successfully recommissioned the Anglo Convertor Plant (ACP) phase B unit in the period.

With our stated strategic objective of embedding asset reliability across our assets we will continue with the planned rebuild of the Polokwane smelter in Q3. During this period, we will use this time to take Mogalakwena South Concentrator down for planned extended maintenance. As a result of the headwinds in Q1 leading to a slow start to the year, the delay in delivery of HME, and with the planned maintenance in Q3, we will see an impact on production, with little ability to catch-up in the year. In addition, we anticipate lower receipts of third-party purchase of concentrate and as a result, we have conservatively decided to revise down metal-in-concentrate production to 3.9 – 4.3 million PGM ounces. Refined production will therefore also revise down to between 4.0 – 4.4 million ounces and our unit cost guidance is revised to between R14,000 – R15,000 per PGM ounce due to lower anticipated production and the continued inflationary pressure on input costs.

The discipline to continue with the asset reliability maintenance cycle means we will see short term impacts on production, but we continue to improve our operating environment and the reliability of our assets to deliver sustainable value creation.”

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