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AMS - Anglo Platinum Limited - Abridged audited financial report for the year

Release Date: 07/02/2011 09:00
Code(s): AMS
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AMS - Anglo Platinum Limited - Abridged audited financial report for the year ended 31 December 2010 and cash dividend declaration AngloAmerican Platinum Anglo Platinum Limited Anglo Platinum Limited and its Subsidiaries ("Platinum") A member of the Anglo American plc group (Incorporated in the Republic of South Africa) (Registration number 1946/022452/06) JSE Codes: AMS ISIN: ZAE000013181 ABRIDGED AUDITED FINANCIAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2010 AND CASH DIVIDEND DECLARATION PERFORMANCE HIGHLIGHTS 2010 Continued strong improvement in safety performance with LTIFR down to 1.17 from 1.37; tragically eight employees lost their lives during the year Resumption of dividend payments; final dividend declared of R1.8 billion, R6.83 per share Excellent rebound in profitability: headline earnings up 595% to R4 931 million Refined platinum production of 2.57 million ounces; refined platinum sold of 2.52 million ounces Cash operating costs of R11 730 per equivalent refined platinum ounce, up 4% compared to 2009 Net debt of R4.1 billion, down from R19.3 billion due to successful rights issue, improved cash flow from stronger metals prices and strict working capital management Anglo Platinum received new order mineral right grant letters on 21 July 2010 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Audited Audited Year Year ended ended 31 December % 31 December
R millions 2010 Change 2009 GROSS SALES REVENUE 46 352 25 36 947 Commissions paid (327) 26 (260) NET SALES REVENUE 46 025 25 36 687 COST OF SALES (37 991) 9 (34 715) GROSS PROFIT ON METAL SALES 8 034 307 1 972 Other net expenditure (405) 39 (659) Market development and promotional (376) 4 (392) expenditure OPERATING PROFIT 7 253 688 921 Profit on disposal of 37% interest 788 - in Western Bushveld Joint Venture Gain on listing of Bafokeng 4 466 - Rasimone Platinum Mine (BRPM) (Note 7) Profit on disposal of investment in - 1 982 Booysendal Joint Venture Profit on disposal of 51% interest - 536 in Bokoni Platinum Mines Interest expensed (318) 40 (532) Interest received 248 (16) 296 Remeasurements of loan and 302 (93) receivables Dividends received - 64 Loss from associates (426) (114) (199) PROFIT BEFORE TAXATION 12 313 314 2 975 Taxation (2 197) 153 PROFIT FOR THE YEAR 10 116 223 3 128 OTHER COMPREHENSIVE INCOME Deferred foreign exchange (240) (85) translation losses Share of other comprehensive 14 (19) income/(losses) of associates Gain on available for sale 129 - investments TOTAL COMPREHENSIVE INCOME FOR THE 10 019 231 3 024 YEAR PROFIT ATTRIBUTABLE TO: Owners of the Company 9 959 231 3 012 Non-controlling interests 157 35 116 10 116 223 3 128 TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Company 9 862 239 2 908 Non-controlling interests 157 35 116 10 019 231 3 024 RECONCILIATION BETWEEN PROFIT AND HEADLINE EARNINGS Profit attributable to shareholders 9 959 3 012 Less: Declared and undeclared - (5) cumulative preference share dividends and related STC Basic earnings attributable to 9 959 3 007 ordinary shareholders Adjustments Profit on disposal of 37% interest (788) - in Western Bushveld Joint Venture Tax effect thereon 17 - Gain on listing of BRPM (4 466) - Tax effect thereon 111 - Profit on disposal of investment in - (1 982) Booysendal Joint Venture Profit on disposal of 51% interest - (536) in Bokoni Platinum Mines Profit on sale of other mineral (14) (64) rights and investments Tax effect thereon 2 - Loss on disposal and scrapping of 153 389 property, plant and equipment Tax effect thereon (43) (109) Headline earnings attributable to 4 931 705 ordinary shareholders Add: Declared and undeclared - 5 cumulative preference share dividends and related STC Headline earnings 4 931 595 710 Number of ordinary shares in issue 261.6 236.8 (millions) Weighted average number of ordinary 254.8 243.7* shares in issue (millions) Headline earnings per ordinary share (cents) Headline 1 935 570 289* Diluted 1 929 567 289* Earnings per ordinary share (cents) Basic 3 909 217 1 234* Diluted 3 896 217 1 230* * The figures for 2009 have been restated for the impact of the bonus element of the rights offer. (Refer to note 50 in the 2010 annual report for full details). SEGMENTAL INFORMATION Net sales Operating Revenue contribution Depreciation
Audited Audited Audited Audited Audited Audited Year Year Year Year Year Year ended ended ended Ended ended ended 31 31 31 31 31 31
December December December December December December R millions 2010 2009 2010 2009 2010 2009 OPERATIONS Bathopele 2 526 1 950 701 305 299 274 Mine Khomanani 1 709 1 489 129 14 182 183 Mine Thembelani 1 735 1 170 292 (28) 165 124 Mine Khuseleka 2 275 2 273 299 50 209 228 Mine Siphumelele 1 590 1 566 178 (102) 200 243 Mine Tumela Mine 5 162 4 173 1 831 1 171 460 363 Dishaba Mine 2 634 2 126 609 451 260 170 Union Mine 5 099 4 135 1 331 816 488 445 Mogalakwena 6 187 4 540 1 927 428 1 321 1 307 Mine Twickenham 70 127 (155) (111) 34 69 Platinum Mine Modikwa 1 304 1 054 270 (109) 156 246 Platinum Mine Kroondal 2 202 1 564 730 301 67 59 Platinum Mine Marikana 636 637 128 122 30 28 Platinum Mine Mototolo 983 727 325 182 81 81 Platinum Mine Bafokeng- Rasimone Platinum 1 019 1 184 176 198 121 90 Mine Bokoni - 557 - (207) - 11 Platinum Mine 35 131 29 272 8 771 3 481 4 073 3 921 Western Limb Tailings Retreatment 672 452 179 84 85 73 (WLTR) Masa Chrome 376 247 356 231 2 2 Total - mined 36 179 29 971 9 306 3 796 4 160 3 996 Purchased 9 846 6 716 913 236 161 130 metals 46 025 36 687 10 219 4 032 4 321 4 126
Other costs (2 185) (2 060) Gross profit 8 034 1 972 on metal sales CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Foreign currency Available Share Share translation for sale
R millions capital premium reserve reserve Balance as at 31 December 24 * 9 373 (53) - 2008 Total comprehensive income (85) for the year Deferred tax charged directly to equity Preference dividends paid in cash Excess of net asset value over purchase price on acquisition of Unki Mines from fellow subsidiary Cash distributions to minorities Ordinary share capital - * 34 issued Conversion of preference (-) * (6) shares Redemption of preference (-) * (84) shares Shares acquired in terms (-) * (185) of the BSP - treated as treasury shares Shares vested in terms of - * 11 the BSP Equity-settled share based compensation Shares purchased for employees Balance at 31 December 24 * 9 143 (138) - 2009 Total comprehensive income (240) 129 for the year Deferred tax charged directly to equity Proceeds from rights offer 2 * 12 402 (net of costs) Transfer of prior year (121) translation differences on net investment in foreign subsidiary Rights offer shares (30) subscribed for by the Group ESOP - treated as treasury shares Cash distributions to minorities Issue of shares to certain - * 88 former preference shareholders (Note 9) Ordinary share capital - * 18 issued Shares acquired in terms (-) * (270) of the BSP - treated as treasury shares Shares vested in terms of - * 30 the BSP Equity-settled share-based compensation Shares purchased for employees Balance at 31 December 26 * 21 381 (499) 129 2010 * Less than R500 000 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED) Non- Retained controlling
R millions earnings interests Total Balance as at 31 December 2008 19 691 461 29 496 Total comprehensive income for the year 2 993 116 3 024 Deferred tax charged directly to equity 31 31 Preference dividends paid in cash (6) (6) Excess of net asset value over purchase 69 69 price on acquisition of Unki Mines from fellow subsidiary Cash distributions to minorities (82) (82) Ordinary share capital issued 34 Conversion of preference shares (6) Redemption of preference shares (84) Shares acquired in terms of the BSP - (185) treated as treasury shares Shares vested in terms of the BSP (11) - Equity-settled share based compensation 363 363 Shares purchased for employees (21) (21) Balance at 31 December 2009 23 109 495 32 633 Total comprehensive income for the year 9 973 157 10 019 Deferred tax charged directly to equity (28) (28) Proceeds from rights offer (net of 12 404 costs) Transfer of prior year translation 121 - differences on net investment in foreign subsidiary Rights offer shares subscribed for by 30 - the Group ESOP - treated as treasury shares Cash distributions to minorities (192) (192) Issue of shares to certain former (88) - preference shareholders (Note 9) Ordinary share capital issued 18 Shares acquired in terms of the BSP - (270) treated as treasury shares Shares vested in terms of the BSP (30) - Equity-settled share based compensation 475 475 Shares purchased for employees (41) (41) Balance at 31 December 2010 33 521 460 55 018 * Less than R500 000 CONSOLIDATED STATEMENT OF FINANCIAL POSITION Audited Audited Year Year ended ended 31 December 31 December
R millions 2010 2009 ASSETS Non-current assets 65 408 57 778 Property, plant and equipment 37 438 35 283 Capital work-in-progress 17 065 18 074 Investment in associates 7 339 3 301 Investments held by environmental trusts 569 78 Other financial assets 2 904 941 Other non-current assets` 93 101 Current assets 18 393 18 043 Inventories 12 558 11 292 Trade and other receivables 2 988 2 891 Other assets 305 328 Other current financial assets 8 - Cash and cash equivalents 2 534 3 532 TOTAL ASSETS 83 801 75 821 EQUITY AND LIABILITIES Shareholders` equity 55 018 32 633 Non-current liabilities 19 774 34 830 Interest bearing borrowings (Note 4) 6 622 22 773 Obligations due under finance leases 1 2 Other financial liabilities 148 175 Environmental obligations 1 388 1 196 Employees` service benefit obligations - * 6 Deferred taxation 11 615 10 678 Current liabilities 9 009 8 358 Current interest bearing borrowings (Note 4) 22 18 Trade and other payables 6 190 5 409 Other liabilities 2 042 2 119 Other current financial liabilities 183 158 Share-based payment provision 108 162 Taxation 464 492 TOTAL EQUITY AND LIABILITIES 83 801 75 821 *Less than R500 000 CONSOLIDATED STATEMENT OF CASH FLOWS Audited Audited
Year Year ended ended 31 December 31 December R millions 2010 2009 CASH FLOWS FROM OPERATING ACTIVITIES Cash receipts from customers 45 617 36 763 Cash paid to suppliers and employees (34 261) (31 246) Cash generated from operations 11 356 5 517 Interest paid (net of interest capitalised) (220) (424) Taxation paid (905) (396) Net cash from operating activities 10 231 4 697 CASH FLOWS USED IN INVESTING ACTIVITIES Purchase of property, plant and equipment (7 989) (11 301) (includes interest capitalised) Stay-in-business capital (3 573) (3 741) Project capital (3 671) (5 991) Interest capitalised (745) (1 569) Net proceeds on disposal of 13% of Royal 1 323 - Bafokeng Platinum Limited (RBPlat) (Note 7) Proceeds on disposal of interest in Western 186 - Bushveld Joint Venture Subscription for "N" preference shares in (273) - Newshelf 848 (Proprietary) Limited Loans to associates (260) (181) Advances made to Plateau Resources (141) (190) (Proprietary) Limited (Plateau) for the operating cash shortfall facility Receipt of funds in escrow regarding the 537 - Booysendal deal Proceeds on rights in preferences shares - 1 610 Increase in investments held by environmental (507) (27) trusts Other 83 (175) Net cash used in investing activities (7 041) (10 264) CASH FLOWS (USED IN)/FROM FINANCING ACTIVITIES Proceeds from the issue of ordinary share 18 28 capital Proceeds from the rights offer (net of costs) 12 404 - Redemption of preference shares - (84) Purchase of treasury shares for the Bonus (270) (185) Share Plan (BSP) (Repayment of)/proceeds on interest-bearing (16 147) 6 971 borrowings Repayment of finance lease obligation (1) (507) Preference dividends paid - (6) Cash distributions to minorities (192) (82) Net cash (used in)/from financing activities (4 188) 6 135 Net (decrease)/increase in cash and cash (998) 568 equivalents Cash and cash equivalents at beginning of year 3 532 2 870 Transfer from assets held for sale - 94 Cash and cash equivalents at end of year 2 534 3 532 MOVEMENT IN NET DEBT Net debt at beginning of year (19 261) (13 459) Net cash from operating activities 10 231 4 697 Net cash used in investing activities (7 041) (10 264) Other 11 960 (235) Net debt at end of year (4 111) (19 261) NOTES TO THE ANNUAL RESULTS 1. The abridged financial information has been prepared in accordance with the conceptual framework and the measurement and recognition requirements of International Financial Reporting Standards (IFRS), South African Generally Accepted Accounting Practice (SA GAAP) and the information as required by IAS 34: Interim Financial Reporting. 2. The abridged report has been prepared using accounting policies that comply with IFRS and SA GAAP. The accounting policies are consistent with those applied in the financial statements for the year ended 31 December 2009, except for the adoption of various new and revised accounting standards/interpretations. Other than the adoption of IAS 28 - Investments in Associates and IAS 31 - Interests in Joint Ventures, none of these accounting standards and interpretations had an impact on the Group`s results. For the full impact of these changes please refer to the annual report. Audited Audited Year Year ended ended
31 December 31 December 2010 2009 % % 3. Taxation A reconciliation of the standard rate of South African normal taxation compared with that charged in the income statement is set out in the following table: South African normal taxation 28.0 28.0 STC 0.1 0.5 28.1 28.5 Disallowable items (0.3) (0.8) Capital profits (11.1) (23.8) UK Group relief - (12.1) Prior year underprovision 0.6 3.3 Other 0.5 (0.2) Effective taxation rate 17.8 (5.1) Audited Audited Year Year ended ended
31 December 31 December R millions 2010 2009 4. Interest-bearing borrowings The Group has the following borrowing facilities: Committed facilities 21 491 33 009 Uncommitted facilities 4 730 4 769 Total facilities 26 221 37 778 Less : Facilities utilised (6 644) (22 791) Interest-bearing borrowings (6 622) (22 773) Current interest-bearing borrowings (22) (18) Available 19 577 14 987 Weighted average borrowing rate per annum (%) 6.31 8.59 5. Commitments Mining and process property, plant and equipment* Contracted for 1 553 2 317 Not yet contracted for 27 028 32 298 Authorised by the directors 28 581 34 615 Project capital 24 380 30 917 - within one year 3 565 4 209 - thereafter 20 815 26 708 Stay-in-business capital 4 201 3 698 - within one year 2 998 3 469 - thereafter 1 203 229 Capital commitments relating to the Group`s share in associates* Contracted for 362 105 Not yet contracted for 3 185 2 369 3 547 2 474 * The figures for 31 December 2009 have been reclassified to reflect the associates` share of capital commitments separately. These commitments will be funded from existing cash resources, future operating cash flows, borrowings and any other funding strategies embarked on by the Group. The Group has provided Plateau, a company owned by Anooraq, with a facility that covers their senior debt repayments should Plateau not be able to meet its repayments. The facility is limited to 29% of Bokoni Platinum Mine`s free cash flows up to a maximum of R500 million plus accrued interest. Calls on this facility are expected in 2013 and 2014. The Group has provided Lexshell 36 General Trading (Proprietary) Limited (Lexshell 36), a company owned by the Bakgatla-Ba-Kgafela traditional community, with a facility that covers their outstanding hedge exposure. The facility is limited to Union Mine`s cash flows, and call on this facility is considered a remote possibility. The Group has also provided Lexshell 36 with a project capital expenditure facility to fund their proportionate share of any specific new project capital incurred for the development of a new shaft, other than the 5 South Decline Project at Union Mine. This facility expires on 31 March 2015 and is limited to 15% of the capital spend on the shaft. At 31 December 2010, this facility had not been drawn upon. 6. Contingent liabilities Letters of comfort have been issued to financial institutions to cover certain banking facilities. There are no encumbrances of Group assets, other than the assets held under finance leases by the Group. The Group is the subject of various claims, which are individually immaterial and are not expected, in aggregate, to result in material losses. The Group has in the case of some of its mines provided the Department of Mineral Resources with guarantees that cover the difference between closure costs and amounts held in the environmental trusts. At 31 December 2010 these guarantees amounted to R2 493 million (2009: R3 082 million). 7. Disposal of interest in Royal Bafokeng Platinum Limited On 7 December 2009, the Group exchanged its direct interest of 17% in BRPM for a 25.4% interest in RB Plat which was to be listed within twenty four months, subject to favourable market conditions. The BRPM restructuring transaction involved a change in the participation interests of the joint venture from that of joint control and management by Anglo Platinum to RB Plat holding a majority interest and operating the joint venture. Until listing on 8 November 2010, the Group retained an effective 50% economic interest in BRPM and continued to exert joint control over its operations. As a result of the primary listing of RB Plat and the subsequent disposal by the Group of a portion of its shareholding in RB Plat, the Group retained an interest of 12.6% in the company. As the Group no longer exerts significant influence over RB Plat, the investment in RB Plat is accounted for as an available for sale investment in terms of IAS 39. Audited Year
ended 31 December R millions 2010 33% direct interest in BRPM Property, plant and equipment 905 Capital work-in-progress 705 Investments held by environmental trusts 29 Inventories 5 Trade and other receivables 382 Taxation 4 Cash and cash equivalents 93 Deferred taxation (526) Environmental obligations (16) Trade and other payables (45) Other liabilities (70) Net asset value of 33% interest in BRPM at effective date 1 466 Revaluation of 33% interest in BRPM to fair value 2 928 Fair value of 33% interest in BRPM 4 394 Transferred to investment in associates (4 394) -
25% direct interest in RB Plat (obtained in exchange for 17% direct interest in BRPM) Investment in associate - RB Plat 1 131 Transferred from investment in associate 1 044 Transferred from mining property, plant and equipment and 87 capital work-in-progress Carrying value of interest disposed of in RB Plat (568) Total carrying value of investment retained at effective date 563 Revaluation of interest in RB Plat to fair value 690 Fair value of 12.6% interest in RB Plat 1 253 Transferred to available for sale investments (1 253) -
Consideration received for disposal of 13% in RB Plat (net of 1 416 transaction costs) Carrying value of interest disposed of in RB Plat (568) Revaluation of 33% interest in BRPM to fair value 2 928 Revaluation of interest in RB Plat to fair value 690 Gain on listing of BRPM 4 466 Consideration received in cash 1 416 Less: cash and cash equivalent balances disposed of (93) 1 323 8. Changes in accounting estimates for inventory During the year, the Group changed its estimate of the quantities of inventory based on the outcome of a physical count of in-process metals. The Group runs a theoretical metal inventory system based on inputs, the results of previous counts and outputs. Due to the nature of in-process inventories being contained in weirs, pipes and other vessels, physical counts only take place once per annum, except in the PMR which takes place once every two years. This change in estimate has had the effect of decreasing the value of inventory disclosed in the financial statements by R520 million (2009: R161 million). This results in the recognition of an after tax loss of R374 million (2009: R116 million). 9. Issue of ordinary shares to certain former preference shareholders On 31 May 2004, Anglo Platinum issued 40 million preference shares in terms of a circular dated 10 May 2004. The preference shares were convertible into ordinary shares at certain dates over a period of five years from the date of issue. The final conversion date of the preference shares was 31 May 2009. All preference shares not converted by 31 May 2009 were redeemed for cash on the redemption date, being 30 November 2009. The Board acknowledged the fact that certain former preference shareholders missed the opportunity to convert their preference shares into ordinary shares prior to the final conversion date and decided to accommodate these shareholders by making an offer to them to subscribe for the number of ordinary shares that they would have been entitled to on the redemption date, had they converted their preference shares to ordinary shares. The offer was fully subscribed for and resulted in the issue of 189 864 ordinary shares amounting to R88 million. The impact on earnings per share was immaterial. 10. Corporate governance The Board considers that the Company and its subsidiaries applied the King Code on Governance Principles (King III) during the year, except with regard to the appointment of the chairman who is not independent, as explained in the 2010 annual report. 11. Auditors` review The auditors, Deloitte & Touche, have issued their opinion on the Group`s financial statements for the year ended 31 December 2010.The audit was conducted in accordance with International Standards on Auditing. They have issued an unqualified audit opinion. A copy of their audit report is available for inspection at the Company`s registered office. These abridged financial statements have been derived from the Group financial statements and are consistent in all material respects, with the Group financial statements COMMENTARY SAFETY Anglo Platinum achieved a further decrease in its Lost-Time Injury Frequency Rate (LTIFR) during 2010 to a record low of 1.17 hours per 200 000 hours worked, a decrease of 15% year on year. Tragically, eight of our employees lost their lives during the period. We extend our sincere condolences to their families, friends and colleagues. Whilst we have not yet reached our target of zero harm to our employees, we continue to believe that fatalities are unacceptable and that zero harm is possible. We are striving to embed step changes in our safety performance until we have reached zero harm across our operations. To this end, the reduction of 43% in the number of fatalities we have seen in 2010 compared with 2009 appears to herald such a step change. MINERALS LEGISLATION, TRANSFORMATION AND COMMUNITIES Anglo Platinum is fully committed to the Minerals and Petroleum Resources Development (MRPD) Act and the Mining Charter to achieve the associated sustainable economic and social transformation. Anglo Platinum has made significant progress towards achieving its transformation objectives as envisaged by the MPRD Act and the Mining Charter. Noteworthy milestones achieved in support of Anglo Platinum`s social and labour plan include: 12% women in mining, compared with the 10% requirement; 50% historically disadvantaged South Africans in management positions, compared to the 40% requirement; HDSA procurement of 40%, up from 39% reported for 1H10, equating to R8.2 billion spent with HDSA suppliers in 2010 from procurable spend; and Plans in place to build 20 000 houses in the next 10 years. The Company also tracks sustainability targets and our notable achievements include reductions in our water consumption and no level 2 or 3 environmental incidents reported during the year. A total of 894 families have been resettled at the Mogalakwena Mine to date. The remaining 62 families are not opposed to relocation but to the terms of relocation. Engagement is continuing with these families through a Government- led task-team. Permission was granted by the community in 2010 to slightly extend the mine boundary, thereby giving Anglo Platinum additional access to land while the issues preventing the remaining 62 families from relocating are resolved. Anglo Platinum received letters of conversion for mineral rights granted by DMR on 21 July 2010. Furthermore, Anglo Platinum announces its commitment to a multi-billion rand (c.1-2% of market capitalisation) economic empowerment transaction designed to promote long term sustainable development in our host communities and key labour sending areas that have not yet benefitted from Anglo Platinum`s extensive Black Economic Empowerment (BEE) programme to date. The Company has been exploring ways of enhancing and optimising the benefits that accrue to its host communities. The transaction is an important element of this work and a catalyst to its full realisation. We expect the transaction to be concluded within two years, depending on community engagement. The exact terms and final structure of the transaction will be determined following an extensive community engagement process, with the objective of jointly exploring the development aspirations of the host communities and reaching a collective agreement. The ultimate ambition of the Company is to make a meaningful and sustainable contribution to the ability of those communities to thrive well beyond the life of Anglo Platinum`s mining operations. FINANCIAL REVIEW Anglo Platinum`s earnings increased in the year ended 31 December 2010 boosted by higher metal prices. Headline earnings increased to R4.9 billion in 2010, an increase of 595% over 2009. Headline earnings per share attributable to ordinary shareholders increased by 570% to 1 935 cents (2009: 289 cents). The weighted average number of ordinary shares in issue during 2010 was 254.8 million, compared with 243.7 million shares in 2009. The prior year weighted average number of shares and headline earnings per share have been restated due to the proforma increase in the number of shares in issue at 31 December 2009 resulting from the discount at which the rights were offered to shareholders. Headline earnings exclude an after tax profit of R771 million realised on the disposal of Anglo Platinum`s 37% interest in the Western Bushveld joint venture and an after-tax gain of R4.4 billion on the listing of Bafokeng-Rasimone Platinum Mine (BRPM). The gain on the listing of BRPM consists of the profit realised on the disposal of a 13% interest in Royal Bafokeng Platinum Limited (RB Plat), as well as the impact of revaluing the retained interest in both RB Plat and BRPM to fair value. The increase in basic earnings per share was 217% to 3 909 cents (2009: 1 234 cents). Economic conditions for platinum group metal (PGM) prices improved during 2010, resulting in revenue increasing by 25% (or R9.3 billion) to R46 billion. The impact of the stronger metal prices was R15.9 billion, while a stronger rand compared with the US dollar reduced the increase by some R6.0 billion. At 2.52 million ounces, sales volumes were marginally lower compared with those in 2009, negatively impacting revenue by R580 million. The platinum price achieved by Anglo Platinum Limited on sales improved by 34%, from $1 199 per ounce during 2009 to $1 611, while palladium, rhodium and nickel improved by 97%, 61% and 48% respectively. The achieved dollar basket price per platinum ounce sold improved from $1 715 in 2009 to $2 491 - an improvement of 45%. The Rand/US dollar exchange rate for 2010 was on average 11% stronger than in 2009. During 2009 the exchange rate achieved on metal sales was R8.23 compared with R7.29 in 2010. The impact of the stronger rand resulted in an achieved rand basket price per platinum ounce of R18 159, an increase of 29% compared with the 2009 price of R14 115. Cost of sales rose by 9% or R3.3 billion to R38.0 billion. The key drivers of the increase were as follows: - Costs for purchases of metal increased by 38% (or R2.5 billion) to R9.2 billion owing to increased metal prices and an increase in volumes purchased. The latter was primarily the result of the successful conclusion of Anglo Platinum Limited`s BEE transactions with Anooraq Resources Corporation (Anooraq) for Bokoni Platinum Mine (previously Lebowa Mine) in July 2009; and with Royal Bafokeng Resources (Proprietary) Limited (RB Resources) over the BRPM in November 2010. Total production from these operations from the said dates was fully subject to purchase agreements, whereas previously some or all of the production was owned by Anglo Platinum - Cash on-mine costs, smelting and refining costs increased by 1.5% or R348 million to R23.2 billion. Rand operating costs were well contained despite inflationary increases. - Other costs increased by R125 million or 6% to R2.2 billion. Royalty costs were R74 million higher in 2010 (including the new state royalty of R163 million), while costs associated with the transport of metals increased by R23 million. - Depreciation of operating assets rose by R195 million or 4.7%, to R4.3 billion. - The movement in metal inventory included in cost of sales was 9% or R100 million lower than in 2009 and amounted to R995 million. Cost of sales per platinum ounce sold increased to R14 986 per ounce, up by 12% from the 2009 figure of R13 359. This increase is as a result of higher prices paid for purchased metal and lower platinum sales volumes. Cash operating costs per equivalent refined platinum ounce increased by 4.4% to R11 730 per ounce, owing principally to lower mined volumes caused by the shift in production explained in the earlier comment regarding purchases of metals. Productivity for 2010 was at 7.06 mSquared per operating employee, an improvement of 12% over productivity in 2009. This exceeds our strategic objective of 7.00 mSquared per employee for 2010. Asset optimisation, procurement and supply-chain programmes have effectively contributed to our operating performances during 2010. As a result, a much increased percentage of our production is now in the lower half of the industry cost curve. This was enabled by decisive actions to curtail non value-adding operations while replacing lost production from other areas. This improvement was made possible by leadership`s commitment to productivity and cost management principles; and our drive towards a culture of sustained performance. All of these actions created the momentum required to achieve better results in 2010 and we believe will support our performance into 2011. The total number of employees as at 31 December 2010 was 54 022, down from 58 320 as at end 2009. Cash generated from operations increased to R11.4 billion, up by 106% from the R5.5 billion generated in 2009. This increase was mainly due to improved metal prices during 2010 and robust cost management. Cash used in investing activities consisted primarily of capital expenditure of R8 billion (including capitalised interest of R745 million). The net debt position at 31 December 2010 amounted to R4.1 billion rand, compared with R19.3 billion net debt at 31 December 2009. The debt position improved as a result of stronger cash generation by operations; the reduction of capital expenditure to R8 billion; and, most significantly, the successful completion of a R12.5 billion rights issue during the year. Ordinary dividends are declared after consideration of current and future funding requirements, and are paid out of cash generated from operations. Anglo Platinum Limited did not pay an interim dividend in 2010, owing to the company`s net debt position at 30 June 2010. Due to the cash flow generated through the disposal of assets and an improved cash generation performance during the second half of 2010, and considering the final debt position as at 31 December 2010, the Board approved a dividend payment of R1.8 billion on 4 February 2011, which will be paid on 14 March 2011. This translates into a cover of 2.8 times on headline earnings. Anglo Platinum Limited will continue to monitor its capital environment and its ability to manage debt levels adequately, and will consider future dividend payments as the situation allows. When paying dividends, Anglo Platinum will target a dividend cover of between 2 and 3 times, subject to market conditions and short to medium term capital requirements. MARKETS The PGM markets had a strong year in 2010, with a significant recovery in demand from the autocatalyst and industrial markets, healthy demand from the jewellery sector and increasing investor interest in the platinum and palladium markets primarily via Exchange Traded Funds (ETFs). Supply increases from the industry were largely delivered to plan and as a result, the platinum and palladium markets remained essentially in balance. The rhodium market saw a reduced surplus due to improved autocatalyst demand. Anglo Platinum continued its commitment to the development of the PGM markets, working with our industry partners and stakeholders in the maintenance of existing and the development of new industrial applications for the metals, and also maintaining the health of jewellery markets. Autocatalysts Demand for platinum in autocatalysts had another year of solid recovery in 2010, as global production and sales of vehicles increased from lows of 59 and 66 million vehicles in 2009 to reach 73 and 71 million respectively. In particular, vehicle sales in the BRIC countries saw strong growth year on year, with Chinese production of light duty vehicles surpassing that of the traditionally largest market, the US, at close to 16 million. In Europe, the diesel proportion of sales rebounded to 50% in 2010 after declining to 47% in 2009, driven mainly by increased fleet sales. US vehicle inventories have returned to historic averages in 2010 and reached 67 days in December of last year, compared to an average of 62 days in 2009 and a high of 118 seen in February 2008. Industrial Demand from the industrial sector continued to recover from 2009 lows, with capacity utilisation rates in the chemical and petroleum sectors having improved and all major indices seeing significant recovery. New capacity build in the glass sector contributed strongly to this recovery. Jewellery Despite the increase in the platinum price over the year, the jewellery market remained resilient and achieved approximately 1.5 million ounces of new metal demand in 2010. This represents a 30% decline compared with the record demand seen in 2009 when inventory rebuilding took place. Investment 2010 started with strong investor inflows into the platinum and palladium ETFs, particularly into the new ETFs launched in the US. By the end of the year, the aggregate holdings in the platinum ETFs were a record 1.23 million ounces, and a record 2.21 million ounces were held across the palladium ETFs. The investment `sector` is now firmly established as a key source of demand for PGMs, making up 10% and 15% of platinum and palladium 2010 demand respectively. OPERATIONS Equivalent refined platinum production (equivalent ounces are mined ounces expressed as refined ounces) from the mines managed by Anglo Platinum Limited, and its joint venture and associate mines for the year ended 31 December 2010 amounted to 2.484 million, an increase of 1% when compared to 2009. Wholly owned mines (including Union Mine) produced 1.557 million equivalent refined platinum ounces. Western Limb Tailings retreatment increased production by 22% to 41 800 ounces. Purchased equivalent refined ounces from third parties reduced to 92 300 ounces down 20% from 2009 while attributable ounces from joint venture and associate operations increased by 6% to 790 300 ounces. The 4E built up head grade reduced by 2% to 3.23g/t from 2009. The grade was affected by lower planned grades from Mogalakwena Mine and the increased treatment of lower grade surface material supplementing for decreased underground production. The 4E built-up head grade for Merensky and UG2 increased by 2% and 4% respectively. Tonnes milled decreased by 2% to 42.2 million in 2010. This decrease when compared to 2009 was as a result of the successful conclusion of Anglo Platinum`s BEE transactions with Anooraq, regarding Bokoni in July 2009, and with RB Resources regarding the BRPM in November 2010. During 2010, the major focus areas in Process operations were: improving process safety, making asset optimisation a core management process, improving furnace reliability and cost management. Recoveries at managed concentrators increased by 3% despite a decrease of 3% in the built up head grade. Planned furnace maintenance was carried out at the Polokwane and Waterval smelters during the first quarter of 2010, with both smelters resuming normal operations from the second quarter. Refined platinum production increased 5% year on year to 2.57 million ounces. Pipeline inventory was reduced by 119 900 ounces during the year. The reduction was primarily due to the milling and floating of converter slag which had been stockpiled due to deferment of the new slag cleaning furnace project. The intermediate stocks at the RBMR continue to be high as planned, and should start to come down once the new expansion is commissioned. On a mine by mine basis, our equivalent refined platinum ounce performance for the year was as follows: Wholly owned Mines (including Union) Bathopele The mine performed well and production increased 5% to 138 700 ounces compared with 2009. Khomanani The mine intersected five major potholes on the UG2 horizon during the first quarter of 2010. This affected production, which decreased 5% year-on-year to 99 100 ounces. The mine responded with an aggressive development programme to re-establish mining around the potholes and UG2 production should be back to full capacity by the end of the first quarter of 2011. Thembelani Production increased by 22% to 95 600 ounces due to the planned increase in tonnes milled, up 23%, as the mine ramps up. Khuseleka Production of 129 000 ounces represented a decrease of 17% compared with 2009 when Khuseleka 2 shaft was placed onto `care and maintenance`. Production from Khuseleka 1 shaft increased 3% year on year. Siphumelele Production decreased 14% in 2010 to 94 200 ounces compared with 2009 when Siphumelele 2 and 3 shafts were placed onto `care and maintenance`. Production from Siphumelele 1 shaft increased 29% year on year. Tumela Production increased 0.3% compared with 2009 to 295 300, with a 7% increase tonnes milled offset by an 11% reduction in the 4E built up head grade. Dishaba Production of increased by 1% to 152 500 ounces. Tonnes milled increased by 2% but the mine`s 4E built up head grade decreased by 3% largely due to the loss of mining in the Merensky section of the mine caused by geological disturbances associated with intrusive fissure water. Union Production recovered from a weak first half in 2010 to decrease only 2%, to 292 000 ounces, compared with 2009. Mogalakwena Production increased 10% to 260 300 ounces due to a 7% increased in milled volumes to 10.4 million tonnes. Project Mines Twickenham In 2010, Twickenham Mine was handed over to the Anglo Platinum Projects team. A new investment proposal for the project will be submitted for approval in the third quarter of 2011. Equivalent refined ounces reduced to 2 900 ounces from 7 700 ounces. Unki The concentrator at Unki Mine was commissioned in the fourth quarter of 2010. Tonnes mined during the year reached 391 594 compared with 71 750 tonnes in 2009. The mine is now in ramp-up phase and is expected to reach its steady state of 120 000 tonnes milled per month in the third quarter of 2011. Joint Venture Mines Modikwa Production decreased 4% to 129 600 ounces compared with 2009, being adversely affected by safety stoppages and geological conditions at South Shaft and Onverwacht Hill. Kroondal Production increased by 9% to 252 800 ounces as a result of increased productivity and an increase in the 4E measured head grade to 3.80 grams per tonne. Marikana Production from the mine`s open pit was replaced by ore transfer from the Kroondal mine and an increase in underground production. Production increased to 52 600 ounces, up 32% year on year. Mototolo Production declined by 1% year on year to 108 000 ounces, largely due to production interruptions from industrial action in the fourth quarter of 2010. Associate Mines BRPM Production increased by 7% to 184 600 ounces primarily due to the early mining of UG2 ore. Bokoni Production increased by 3% to 62 700 with tonnes milled up 11% offset by a 4% decline in the mine`s 4E built up head grade. CAPITAL EXPENDITURE AND PROJECTS Total capital expenditure excluding capitalised interest for 2010 was R7.2 billion, a decrease of 26% or R2.5 billion from 2009. Stay-in-business capital expenditure amounted to R3 billion - some R500 million lower than in 2009 - while waste-stripping capitalisation expenses at our Mogalakwena operation increased to R599 million from R240 million in 2009. Project capital expenditure was R3.7 billion, down by 39% or R2.3 billion from the 2009 figure. Interest capitalised in terms of international accounting standards was R745 million, down by 53% or R824 million from the previous year. Project capital expenditure for 2010 was spent mostly on the Twickenham Platinum Mine project, the Thembelani 2 shaft replacement project, the Unki Platinum Mine project, and the Khuseleka ore replacement project and the base metal refinery 33 000 tonne nickel expansion project. As it did in 2010, in 2011 Anglo Platinum Limited will pursue the detailed prioritisation of capital projects and stay-in-business expenditure, to ensure that capital funding requirements are aligned with expected production profiles. Consequently, total capital expenditure planned for 2011 is R8 billion, excluding capitalised interest. MINERAL RESOURCES AND RESERVES Anglo Platinum`s total Ore Reserves 4E content decreased by 3% from 170.5 million ounces to 165.5 million ounces primarily owing to: - Reallocation of Ore Reserves back to Mineral Resources (-10.1 million ounces) due to changes in mine designs and scheduling; - The BEE transactions with RB Resources on BRPM and with Wesizwe Platinum Limited (Wesizwe) on the Western Bushveld Joint Venture (-4.7 million ounces) The decrease in Ore Reserves is partly offset by the additional conversion of Mineral Resources to Ore Reserves due to higher confidence mainly at the UG2 Reef (+8.6 million ounces) and to a lesser extent at the Merensky Reef (+1.5 million ounces) and due to a change in the pay limit at Mogalakwena North and Central pits (+4.4 million ounces). The Mineral Resources 4E content decreased by 2.0% from 632.3 million ounces to 619.5 million ounces primarily owing to: - The BEE transactions with RB Resources on BRPM, with Wesizwe on the Western Bushveld Joint Venture and with the Bakgatla-Ba-Kgafela and Pallinghurst on the Magazynskraal project (-23.5 million ounces) - The conversion of Mineral Resources to Ore Reserves at Union and Bafokeng- Rasimone Platinum Mine (-7.0 million ounces) - And a change in the pay limit at Mogalakwena Platreef due to a change in the pay limit (-6.9 million ounces) The decrease in the Mineral Resources is partly offset by the: - Reallocation of previously reported Ore Reserves back to Mineral Resources (+18.5 million ounces) due to: - Changes in mine designs and scheduling, mainly at Tumela and Dishaba Mines and; - Additional geological information mainly at Ga-Phasha and Der Brochen projects and at Bokoni - Acquisition of a 26.6% stake in Wesizwe (+4.6. million ounces) CHANGES IN DIRECTORATE Appointments in 2010 Brian Beamish was appointed non-executive director on 7 May 2010. Godfrey Gomwe was appointed as non-executive director on 1 September 2010. Cynthia Carroll was appointed chairman effective 1 September 2010. Valli Moosa was appointed as lead independent non-executive director effective 1 September 2010. Resignations in 2010 David Weston resigned as non-executive director on 27 January 2010. Fred Phaswana resigned as non-executive director and chairman on 31 August 2010. Other directorate changes Valli Moosa replaced Tom Wixley as deputy chairman effective 1 September 2010 but Tom Wixley remained as an independent non-executive director on the Board. OUTLOOK Anglo Platinum plans to refine and sell 2.6 million ounces of platinum in 2011, 100 000 ounces more than the 2010 plan and which it believes is an appropriate level to meet forecast demand. Anglo Platinum plans to increase equivalent refined platinum production to 2.6 million ounces also, which is just over 100 000 ounces more than in 2010. The additional ounces will come mainly from Khomanani Mine, Tumela Mine and Mogalakwena Mine. Growth will also be supplemented by fresh ounces from the newly commissioned mine in Zimbabwe, Unki, which should supply up to 30 000 ounces of refined platinum in 2011. Given the sustained higher Platinum price since the second half of 2010, Anglo Platinum has reopened Khuseleka Mine`s number 2 shaft, which was placed onto `care and maintenance` during 2009 - this will also add ounces to the production profile from 2011 onwards. Building on the momentum gathered over the past three years, costs will continue to be managed as a priority. In 2011, Anglo Platinum aims to keep cash operating costs per equivalent refined platinum ounce around the same level achieved in 2010. This will be achieved primarily through a further increase in productivity, which is expected to reach 7.30m2 on average per month per employee in 2011, and through the production of 100 000 additional ounces of refined platinum without any material increase in the cost base. An improvement in productivity to 7.30m2 will result in an increase of 27% since the recent low of 5.73m2 in 2008. In addition, cash operating costs per ounce should also be positively impacted by an improved built-up head grade. On average, the group`s average grade of 3.23 g/t achieved in 2010 should increase to 3.3 g/t in 2011. Cost inflation will, however, continue to present the company with challenges this year. `Mining inflation`, as measured by the Producers Price Index, remained well above South African CPI during 2010, at 12.6%, compared to an average inflation rate of 4.3% for the country; and a similar differential is expected in the foreseeable future. During the first half of 2011, wage negotiations with our key trade union contacts will commence in order to settle salaries effective from 1st July 2011. April 2011 will see another 25% increase in Eskom`s electricity tariffs. Following the successful R12.5 billion rights issue, concluded in 1H10, the company`s debt position has been rebased and net debt should reduce further in 2011 from a closing position of R4.1 billion in 2010. Capital expenditure excluding capitalised interest will be R8 billion, R3.5 billion of which will be stay-in-business capital; R0.5 billion will be allocated to waste stripping at Mogalakwena and the remaining R4.0 billion will be allocated to projects capital. A variable dividend policy has been adopted to govern decisions over any dividend payments in future. In essence, consideration will be given to the payment of dividends once Anglo Platinum has allowed for its capital requirements each year and the outlook for the market has been taken into account. Anglo Platinum`s safety improvement plan will ensure that we continue to demonstrate improvements on our journey to zero harm. N F Nicolau B Nqwababa C B Carroll D J Alison Chief Executive Finance Director Chairman Group Company Officer Secretary Johannesburg 4 February 2011 DECLARATION OF FINAL ORDINARY DIVIDEND (NO. 112) Notice is hereby given that a final dividend of 683 cents per ordinary share, in the currency of the Republic of South Africa, has been declared in respect of the year ended 31 December 2010. The dividend is payable to shareholders recorded in the books of the Company at the close of business on Friday, 11 March 2011. Salient dates 2011 Last day to trade (cum dividend) Friday, 4 March First day of trading (ex dividend) Monday, 7 March
Currency conversion date (for Sterling Monday, 7 payment to UK resident shareholders) March Record date Friday, 11 March
Payment date Monday, 14 March Share certificates may not be dematerialised or re-materialised between Monday, 7 March 2011 and Friday, 11 March 2011, both days inclusive. On Monday, 14 March 2011 the dividend will be electronically transferred to the bank accounts of all certificated shareholders, where electronic dividend mandates have been provided to the transfer secretaries. Where electronic fund transfer is either not available or not elected by the shareholder, cheques dated 18 March 2011 will be posted on that date at the risk of shareholders. Holders of dematerialised shares will have their accounts credited at their CSDP or broker on 14 March 2011. Shareholders registered with addresses in the United Kingdom will be paid the dividend in Pounds Sterling at the rate of exchange determined on Monday, 7 March 2011 by Computershare in the UK, who act as the Company`s UK paying agents. SUPPLEMENTARY INFORMATION CONSOLIDATED STATISTICS* Year Year ended ended 31 December 31 December
Total operations 2010 2009 Marketing statistics Average market prices achieved Platinum US$/oz 1 611 1 199 Palladium US$/oz 507 257 Rhodium US$/oz 2 424 1 509 Gold US$/oz 1 259 1 002 Nickel US$/lb 9.70 6.54 Copper US$/lb 3.23 2.20 US$ Basket price (Net sales US$/oz Pt sold 2 491 1 715 revenue per Pt oz sold) US$ Basket price (Net sales US$/oz PGM sold 1 336 926 revenue per PGM oz sold) Platinum R/oz 11 733 9 893 Palladium R/oz 3 690 2 107 Rhodium R/oz 17 731 12 462 Gold R/oz 9 106 8 105 Nickel R/lb 71.23 52.85 Copper R/lb 23.62 17.76 R Basket price (Net sales R/oz Pt sold 18 159 14 115 revenue per Pt oz sold) R Basket price (Net sales R/oz PGM sold 9 740 7 621 revenue per PGM oz sold) Average exchange rate R/US$ 7.2890 8.2327 achieved on sales Exchange rate at end of R/US$ 6.6031 7.3787 year Financial statistics and ratios Gross profit margin % 17.5 5.4 Earnings before interest, R millions 11 271 4 936 taxation, depreciation and amortisation (EBITDA) Operating profit to average % 14.0 2.0 operating assets Return on average % 23.1 10.1 shareholders` equity Return on average capital % 12.3 1.5 employed Interest cover - EBITDA 11.7 2.5 Net debt to total capital % 7.0 37.1 employed Interest-bearing debt to % 12.1 69.8 shareholders` equity Net asset value per R 210.3 137.8 ordinary share Cost of sales per total Pt R 14 986 13 359 oz sold * Cash operating cost per R 11 730 11 236 equivalent refined Pt oz (excluding ounces from purchased concentrate and associated costs) Cash operating cost per R 11 336 11 261 refined Pt ounce Equivalent refined platinum 000 oz 2 484.0 2 464.3 production Pipeline stock adjustment 000 oz (34.0) 8.5
Refined platinum production 000 oz (2 569.9) (2 451.6) Mining 000 oz (1 989.3) (1 966.8) Purchase of concentrate 000 oz (580.6) (484.8) Platinum pipeline movement 000 oz (119.9) 21.2 Not reviewed or audited REGISTERED OFFICE 55 Marshall Street, Johannesburg, 2001 (P.O. Box 62179, Marshalltown, 2107) Telephone +27 11 373-6111 Facsimile +27 11 373-5111 REGISTRARS Computershare Investor Services (Proprietary) Limited (Registration No. 2004/003647/07) 70 Marshall Street, Johannesburg, 2001 (P.O. Box 61051, Marshalltown, 2107) Telephone +27 11 370-5000 Facsimile +27 11 688-5200 The 2010 annual report will be posted to shareholders on or about 21 February 2011. Detailed results are available on the Internet at: http://www.angloamericanplatinum.com E-mail enquiries should be directed to: amulholland@angloplat.com Date: 07/02/2011 09:00:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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