The SA PGM operations continued to deliver solid operating results, with 4E PGM production increasing by 20% year-on-year to 1,896,670 4Eoz (including 60,532 4Eoz of third-party concentrate treated at the Marikana smelting and refining operations).
This was despite significant operational headwinds, including safety stoppages, employee unavailability due to the COVID-19 virus and ongoing power disruptions in South Africa.
Contrary to prevailing trends across the global mining industry, ongoing cost management and higher by-product revenues offset significant inflationary cost pressures and higher royalties, resulting in AISC for 2021 declining by 5% to R16,982/4Eoz (US$1,148/4Eoz) compared with 2020. This consistent cost management continues to enhance the relative competitiveness of the SA PGM operations, which have moved significantly towards the lower half of the global industry cost curves over the last five years, from the upper end of the curves prior to integration into the Group. This is the outcome of the ongoing realisation of synergies as envisaged, prior to consolidation of these assets.
The SA PGM operations generated adjusted EBITDA of R51.6 billion (US$3.5 billion) for 2021 which was 78% higher than for the previous year and four-fold higher than the total acquisition cost of these assets, a substantial return on investment.
Mined PGM production from the US PGM operations in 2021 of 570,400 2Eoz was towards the lower end of revised annual guidance, primarily due to the ongoing impact of the rail collision safety incident in June 2021, with production of 272,099 2Eoz for H2 2021, 9% lower than for H1 2021 as a result.
The implementation of rail safety enhancements following the safety incident in June 2021, has necessitated shutting down mining blocks at the Stillwater West mine, which remains constrained by Mine Safety and Health Administration (MSHA) stop orders and new operating procedures.
Additionally, production from the East Boulder mine was impacted by electrical outages in December 2021 because of severe weather conditions. AISC for the US PGM operations increased by 15% to US$1,004/2Eoz (R14,851/2Eoz), primarily due to the shortfall in production and above inflation cost increases on consumables due to global logistical constraints. Increasing skills shortages in North America and high employee attrition rates have also resulted in an increased reliance on contract employment at significantly higher costs.
Adjusted EBITDA for the US PGM underground operations of US$727 million (R10.8 billion) was 2% lower year-on-year as a result.