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AMS - Anglo Platinum Limited - Quarterly review and production report for the
period 1 January 2011 to 31 March 2011
ANGLO PLATINUM LIMITED
Incorporated in the Republic of South Africa
Registration number 1946/022452/06
Share code: AMS
ISIN: ZAE000013181
("Amplats" or "the Company")
QUARTERLY REVIEW AND PRODUCTION REPORT FOR THE PERIOD 1 JANUARY 2011 TO 31
MARCH 2011
OVERVIEW
- LTIFR improved by 7%, to 1.22, in the first quarter of 2011.
- Regrettably, four fatalities occurred during the quarter.
- Refined platinum production was 533 koz, representing an increase of 19%
year on year.
- Cash operating costs per equivalent refined platinum ounce were R12 728,
up by 9% on the cost of R11 730 for the previous year.
- Alchemy, Amplats` Community Empowerment Project, was launched by
President Zuma.
REVIEW OF THE QUARTER
After a very good start the first quarter ended poorly, with extraordinary
safety stoppages that affected production from underground mines negatively.
SAFETY
Regrettably, four employees lost their lives at Amplats during the first
quarter. We extend our sincere condolences to their families, friends and
colleagues.
At 1.22, the lost-time injury frequency rate (LTIFR) is better than the 1.31
seen in the first quarter of 2010, but slightly worse than the 1.17 achieved
during 2010 as a whole.
Clearly, safety has been a major concern during the quarter. We experienced
more safety stoppages in the first quarter of 2011 than during the whole of
last year. The very high number of safety stoppages led to regular breaks in
production momentum. As a result we completely reviewed all safety-related
issues. In the process we engaged with our colleagues from Labour unions and
the Department of Minerals Resources, as we remain committed to, and
supportive of, all safety improvement initiatives. By the end of the quarter
the extraordinary safety stoppages had come to an end, and we have been
striving to ensure the continued implementation of the safety-improvement
initiatives we have been working on for the past three years. We are confident
that we are back on track in our journey to `zero harm`.
OPERATIONS
Refined platinum production of 533 koz was 19% better than production during
the first quarter of 2010. At 568 koz, equivalent ounces were down 5% on
production in the first quarter of last year. The lower production was a
direct result of the extraordinary safety stoppages. Nevertheless, the
production deficit was partly made up from other sources. Tonnes from surface
materials increased by 44% or 234 kt year on year while Mogalakwena Mine
milled 14% more volume over the same period.
Production from our own mines was 368 koz - down 10koz or 3% year on year.
This was the result of a 6% decline in area mined. Bathopele, Tumela and
Dishaba contributed the most to the lower production offset by higher volume
at Mogalakwena and new ounces from Unki.
Joint ventures reported lower production volumes with equivalent refined
platinum ounces, inclusive of both mined and purchased production net of
concentrate sold, down 6% at 181 koz. Safety stoppages together with reduced
face availability, unprotected strike and flooding contributed to the
reduction in production.
Productivity declined by 15% from 6.83m2 per employee per month in Q1 2010 to
5.82m2 per employee per month in Q1 2011. This was a direct result of the
lower-than-planned area mined. During the period the labour complement was
below the planned level.
Work done to improve grade bore fruit - the built-up head grade increased by
2% year on year from 3.08g/t to 3.14g/t in the first quarter of 2011. As the
weighting of higher-grade platreef ore at Mogalakwena increases and as the
underground volumes increase, the grade is expected to improve further.
Costs were also directly affected by the lower area mined. At R12 728 per
equivalent refined platinum ounce, they are some 9% higher than the R11 730
per equivalent refined platinum ounce in 2010. At R480, the cost per tonne
milled compares favorably with the cost of R493 per tonne milled in the last
quarter of last year. Actual expenditure was well controlled; and with
improved production from underground mines, costs per ounce will improve.
CAPITAL PROJECTS AND BALANCE SHEET
Capital expenditure excluding capitalized interest stood at R1.3 billion at
the end of quarter one and is in line with the plan for the year.
At R5 billion, net debt is slightly better than expected owing to higher
revenues from a higher basket price in the first quarter.
GUIDANCE FOR THE REMAINDER OF 2011
Despite the production losses in the first quarter, Amplats remains confident
of refining and selling 2.6 million ounces in 2011.
Action plans are being implemented to make up the lost production from
underground. The positive results of these plans will result in costs below
R12 000 per ounce and productivity of 7.3 m2 per employee per month. Capital
is still forecast at R8 billion for the year.
The platinum price continues to be forecast at an average of at least $1 800
per ounce, as diesel share recovery in Europe, healthy jewellery sales and
improved industrial demand continue to support the price. Moreover, supply is
expected to be slightly lower than last year. The continued strength of the
rand balances the higher dollar price.
While the average basket price for the first quarter was R21 384, it has
treaded towards R20 000 per ounce as the rand has strengthened. Despite this,
the basket price is expected to be better than last year`s, resulting in
improved earnings.
The above forecast information has not been reviewed and reported on by the
Company`s external auditors.
FINALLY
Much has been achieved over the past few years and much of this has led to
permanent change. The first quarter has been challenging, but the underlying
trend is still intact. The Amplats team is well positioned and is busy
addressing the problems. Recovery is under way.
QUARTERLY PRODUCTION STATISTICS
Quarter ended % Change
March March December March March Q1
Q1 `11 `11
2011 2010 2010 vs vs
March December
Q1 `10 Q4 `10
Production
statistics
Tonnes mined - 000 18,819 18,334 16,739 3% 12%
opencast (see
note 1)
Tonnes broken - 000 6,208 6,651 6,874 -7% -10%
underground
mines
Tonnes milled 000 10,102 10,233 10,416 -1% -3%
Merensky / UG2 per 1 1: 4.1: 1: 3.4: 3.1 1: 3.7:
/ Other tonnes Merensky 4.5 3.5
(see note 2) tonne
4E Built-up g/tonne 3.14 3.08 3.33 2% -6%
head grade milled
Merensky reef 5.28 5.01 5.38 5% -2%
UG2 reef 3.72 3.72 3.81 0% -2%
Platreef 2.81 2.54 2.74 11% 3%
(Mogalakwena
Mine)
MSZ reef (Unki 2.99
Mine)
Surface sources 1.23 1.17 1.43 5% -14%
including WLTR
Equivalent 000 oz
refined
platinum
production (see
note 3)
Mined 433.4 463.0 494.1 -6% -12%
Purchased 136.5 135.0 148.0 1% -8%
Sold -2.3 -3.3 -2.0 -30% 15%
Attributable to 567.6 594.7 640.1 -5% -11%
Anglo American
Platinum
Total refined
production
Platinum 000 oz 532.9 446.7 872.4 19% -39%
Palladium 000 oz 288.2 247.0 502.6 17% -43%
Rhodium 000 oz 85.7 61.6 111.4 39% -23%
Gold 000 oz 28.5 17.4 20.7 64% 38%
PGMs 000 oz 1,055.7 869.4 1,682.8 21% -37%
Nickel 000 4.8 4.4 5.0 9% -4%
tonnes
Copper 000 3.5 2.6 2.9 35% 21%
tonnes
Pipeline stock - - -
adjustment
Refined 000 oz 531.4 446.7 872.3 19% -39%
platinum
production
Mining 000 oz 408.7 336.6 679.9 21% -40%
Purchase of 000 oz 122.7 110.1 192.4 11% -36%
concentrate
Platinum 000 oz 36.2 148.0 (232.2)
pipeline
movement
Employees
(Managed
operations: end
of period)
Own enrolled 48,553 48,331 48,224 0% 1%
employees
Contractor 4,838 8,025 5,798 -40% -17%
employees
Total employees 53,391 56,356 54,022 -5% -1%
for managed
operations
m2 per total 5.82 6.91 7.10 -16% -18%
operating
employee
Notes:
1. Includes Mogalakwena, Modikwa, Kroondal and Marikana opencast
operations
2. Other tonnes includes both Platreef and other surface sources
3. Mine`s production converted to equivalent refined production using
Anglo American Platinum`s standard smelting and refining recoveries
Johannesburg, South Africa
21 April 2011
For further information, please contact:
Kgapu Mphahlele
+27 (0) 11 373 6239
kmphahlele@angloplat.com
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 21/04/2011 08:00:43 Supplied by www.sharenet.co.za
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