Wrap Text
Update on Guidance and Outlook
Anglo American Platinum Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1946/022452/06)
Share Code: AMS
ISIN: ZAE000013181
(“The Company" or "Anglo American Platinum")
9 December 2022
Anglo American Platinum provides an update on 2022 guidance and outlook
* M&C production and refined production for 2022 expected to be within guidance
* 2023-2025 guidance adjusted to reflect new operating conditions
* The Future of Mogalakwena workstreams continue to make progress
Natascha Viljoen, CEO of Anglo American Platinum, comments:
“Despite navigating through several headwinds, we maintained a stable operating environment and expect to close the financial
year within guidance, with metal-in-concentrate of around 4.0 million ounces and refined production of around 3.8 million ounces.
We continue to experience high levels of inflationary cost pressures, leading to a unit cost of around R15,300 per PGM ounce and
will continue with our strong focus on cost mitigation and containment in 2023. We have updated our operational outlook and
revised our medium-term production guidance with a focus on ensuring safe and stable operational momentum. We continue to
progress the Future of Mogalakwena, with a view that a decision on the third concentrator will be made within 18-24 months to
ensure capital efficiency, improve technology deployment, and mitigate supply chain and inflationary pressures to enable the
successful execution of a highly value accretive project.”
Update on guidance and outlook
Anglo American Platinum provides an update on its operational outlook and guidance as follows:
2 0 2 2 outlook 2 0 2 3 foreca st 2 02 4 foreca st 20 2 5 foreca st
units (New)
PGM meta l- in- concentra te million ounces ~4 .0 3 .6 - 4 .0 3 .6 - 4 .0 3 .5 - 3 .9
(M&C) Previously: 3.8 - 4.1 Previously: 4.1 - 4.5 Previously: 4.1 - 4.5
Platinum M&C million ounces ~1.9 1.65 - 1.85 1.65 - 1.85 1.6 - 1.8
Previously: 1.9 - 2.1 Previously: 1.9 - 2.1
Palladium M&C million ounces ~1.2 1.15 - 1.25 1.15 - 1.25 1.1 - 1.2
Previously: 1.3 - 1.4 Previously: 1.3 - 1.4
Other M&C million ounces ~0.9 0.8 - 0.9 0.8 - 0.9 0.8 - 0.9
Previously: 0.9 - 1.0 Previously: 0.9 - 1.0
Refined PGM million ounces ~3 .8 3 .6 - 4.0 3 .6 - 4 .0 3 .3 - 3 .7
Previously: 3.7 - 3.9 Previously: 3.8 - 4.2 Previously: 4.1 - 4.5
Unit cost ( ZAR) ZAR / PGM ounce ~1 5 ,3 0 0 16,800 - 17,800
Previously: 14,000 - 15,000
Please note that PGMs stands for: platinum, palladium, rhodium, iridium, ruthenium, and gold
2022 guidance
In the year, we maintained a stable operating performance navigating multiple headwinds including Eskom load-shedding,
rainfall, and lower grades at Mogalakwena to deliver our M&C production. Mototolo and Unki are expected to deliver strong
production following the successful completion of the debottlenecking projects in 2021. As a result, we expect to end the year
with M&C production of around 4 million PGM ounces, within guidance.
As we continue our asset integrity and reliability programme, we have focused on our capital reinvestment into our processing
assets, with the full rebuild of the Polokwane smelter starting in Q3 this year. Despite the setbacks with sub-standard materials
being delivered for the smelter, and supply chain constraints, we have resolved all the issues, we have now completed the smelter
rebuild and the reheat of the smelter will start on 10 December, with the first matte tap expected in early January.
Due to Eskom load-shedding and the delay in the Polokwane smelter rebuild, total built-up work-in-progress inventory at the
end of the year will be c.350,000 PGM ounces. As a result, refined production should be c.3.8 million PGM ounces, again within
guidance. The build-up in work-in-progress inventory should be largely refined in 2023, with c.100,000 PGM ounces to be refined
in 2024, which equates to a total R7.0 billion EBITDA benefit over the two years at current spot prices and ZAR/USD exchange
rates.
Unit cost of production in 2022 has been impacted by ongoing inflationary pressure on input costs due to higher diesel, fuel, and
consumable prices owing to the effects of Covid-19 on supply chains, import logistics constraints, Eskom load-shedding, as well
as lower production. As a result, unit cost guidance for the 2022 financial year will be c.R15,300 per PGM ounce or $950 per PGM
ounce.
Total capital expenditure for 2022 is expected to be around R17.3 billion, including stay-in-business capital of around R9.5 billion.
Outlook 2023 – 2025
We have revised our medium-term outlook to reflect our revised operational environment. In 2023 and 2024, metal-in-
concentrate production will reduce due to:
1. Lower grade at Mogalakwena. The results of our increased exploration drilling initiative has increased the confidence of
our Mineral Resource, and has reflected a reduction in higher-grade ore volumes, lowering the overall weighted-average
grade at the mine.
2. Infrastructure closures, challenging geological ground conditions and the current opencast operations coming to the
end of life-of-mine, will result in lower volumes from Amandelbult. A decision has been taken to close the aging
Merensky concentrator. The UG1 and UG2 concentrator plants can process the mined production, driving better
efficiencies, lower costs, and reduced ongoing capital expenditure. The cost benefits in closing the plant will be around
R200 million per annum. Work continues on the mechanised section at Amandelbult, albeit with a slower production
ramp-up of ounces. A decision will be taken at the end of 2023 as to whether to continue with the program or adopt a
modernised conventional method of mining.
3. Our expectation that we will continue to receive lower purchase-of-concentrate volumes than previously anticipated.
The Kroondal Joint Operation, which is 50% own-mined material and 50% purchase-of-concentrate material and is coming
towards the end of its life-of-mine, and the Siyanda purchase-of-concentrate agreement both switch to tolling agreements in
2024 and 2025, respectively. This will result in lower M&C production volumes, reflecting the change in commercial terms. As a
result, M&C production is expected to be between 3.6 – 4.0 million PGM ounces for the next two years, with the impact of the
move to higher proportions of tolling material in 2025 moving M&C production guidance to 3.5 – 3.9 million PGM ounces.
With the Polokwane smelter back online, all produced metal-in-concentrate should be refined, as well as the release of the build-
up in work-in-progress inventory. Incorporating normalised recovery losses, we expect refined production, excluding tolling in
2023-2024 to be 3.6 – 4.0 million PGM ounces and 3.3 – 3.7 million PGM ounces in 2025.
Unit cost guidance for 2023 will increase to between R16,800 – R17,800 per PGM ounce, or between $990-$1,050 per PGM
ounce, as we expect to see a continuation of high energy, chemical, explosives, diesel, and other imported input costs, as well as
lower production.
Future of Mogalakwena
The Future of Mogalakwena (FoM) work continues to make good progress in the six workstreams, which include:
* Resource development plan – optimal open-pit plan, including progressing underground opportunities.
* Operational efficiencies (P101) – optimise mine plan and operational performance.
* Communities – create trusting relationships and valued partnerships.
* Technology and innovation – develop and deploy technology, including hydrogen fuel-cell trucks.
* Expanding concentrator capacity – design and build the concentrator of the future.
* Downstream processing – utilise downstream processing to maximise value.
Each of these workstreams have a number of steps to unlock value. Whilst being integrated, it allows for separate approval stage
gates and an optimised development pathway.
Significant work has taken place on the options for the third concentrator although our immediate focus is to continue to improve
the operating performance at Mogalakwena so that we deliver sustainable production.
The construction of the concentrator, subject to approval, is likely to commence in 18-24 months. The time between now and
then will be used to further improve capital investment efficiencies and therefore returns on the asset. This also allows for time
to address current supply chain disruptions, availability of construction resources and the impact of a high inflation environment.
Over the next 18-24 months we will specifically focus on:
1. Further optimising the specifications and configuration of the new concentrator to ensure we maximise returns.
2. Incorporating our latest in-field learnings for the technologies, which are currently deployed on the North concentrator.
This includes coarse particle recovery (CPR), which brings significant energy and water efficiency and tailings reduction
benefits.
3. Finalising plant designs, procurement packages and securing the resources to ensure a successful execution of the
project.
We believe we are being disciplined in our capital allocation to ensure we deliver the highest value option, and the additional
time allows us to improve technology deployment and capital efficiency. There is minimal net present value (NPV) impact from
starting construction in 2026 or 2028 due to availability and quality of ore to be fed into the concentrator. As the twin
underground decline ramps up, higher grade material will be available to feed into the concentrator, which offsets the 18-24
months decision to start construction of the third concentrator.
Anglo American Platinum update call
Natascha Viljoen, CEO, and Craig Miller, Finance Director, will host an update call at 14:30 (SAST). The conference call pre-
registration details are as below and, on our website, and a replay will be available.
Conference call pre-registration:
https://services.choruscall.za.com/DiamondPassRegistration/register?confirmationNumber=3610499&linkSecurityString=7e75
5812e
Anglo American Platinum media call
Natascha Viljoen and Craig Miller will also host a media call at 13:30 (SAST).
Conference call pre-registration:
https://services.choruscall.za.com/DiamondPassRegistration/register?confirmationNumber=5916736&linkSecurityString=cf367
3640
Anglo American plc investor update
The Anglo American plc investor update presentation is available on the Anglo American website
at: https://www.angloamerican.com/investors/investor-presentations.
This announcement contains forward-looking statements which are based on the Company’s current beliefs and expectations
about future events. The operational and financial forecasts provided in this announcement are estimates and have not been
reviewed and reported on by the Company’s external auditors.
Sponsor:
Merrill Lynch South Africa (Pty) Limited t/a BofA Securities
For further information, please contact:
Investors: Media:
Emma Chapman Nomonde Ndwalaza
(SA) +27 (0) 76 480 1570 (SA) +27 (0) 66 311 1133
emma.chapman@angloamerican.com nomonde.ndwalaza@angloamerican.com
Yuraisha Moodley
yuraisha.moodley@angloamerican.com
Notes to editors:
Anglo American Platinum Limited is a member of the Anglo American plc Group and is a leading primary producer of platinum
group metals. The company is listed on the Johannesburg Securities Exchange (JSE). Its mining, smelting and refining operations
are based in South Africa. Elsewhere in the world, the Group owns Unki Platinum Mine and smelter in Zimbabwe. Anglo American
Platinum is committed to the highest standards of safety and continues to make a meaningful and sustainable difference in the
development of the communities around its operations.
www.angloamericanplatinum.com
Anglo American is a leading global mining company and our products are the essential ingredients in almost every aspect of
modern life. Our portfolio of world-class competitive operations, with a broad range of future development options, provides
many of the future-enabling metals and minerals for a cleaner, greener, more sustainable world and that meet the fast growing
every day demands of billions of consumers. With our people at the heart of our business, we use innovative practices and the
latest technologies to discover new resources and to mine, process, move and market our products to our customers – safely and
sustainably.
As a responsible producer of diamonds (through De Beers), copper, platinum group metals, premium quality iron ore and
steelmaking coal, and nickel – with crop nutrients in development – we are committed to being carbon neutral across our
operations by 2040. More broadly, our Sustainable Mining Plan commits us to a series of stretching goals to ensure we work
towards a healthy environment, creating thriving communities and building trust as a corporate leader. We work together with
our business partners and diverse stakeholders to unlock enduring value from precious natural resources for the benefit of the
communities and countries in which we operate, for society as a whole, and for our shareholders. Anglo American is re-imagining
mining to improve people’s lives.
www.angloamerican.com
Date: 09-12-2022 10:00:00
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