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ABRIDGED REVIEWED INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2012
ANGLO AMERICAN PLATINUM LIMITED
Incorporated in the Republic of South Africa
(Registration number 1946/022452/06)
Share code: AMS
ISIN: ZAE000013181
ABRIDGED REVIEWED INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS
ENDED 30 JUNE 2012
ABRIDGED REVIEWED INTERIM FINANCIAL REPORT IN ACCORDANCE WITH
RECOGNITION AND MEASUREMENT REQUIREMENTS OF INTERNATIONAL
FINANCIAL REPORTING STANDARDS (IFRS)
Anglo American Platinum Limited’s (Anglo American Platinum’s)
consolidated abridged reviewed interim financial results for the
six months ended 30 June 2012 have been independently reviewed by
the Group’s external auditors. The preparation of the Group’s
interim results for the six months ended 30 June 2012 was
supervised by the Finance Director, Mr B Nqwababa.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Reviewed Reviewed Audited
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2012 2011 % 2011
Notes Rm Rm change Rm
Gross sales revenue 19,532 24,972 51,484
Commissions paid (122) (167) (367)
Net sales revenue 19,410 24,805 (22) 51,117
Cost of sales (17,331) (20,038) 14 (42,562)
Gross profit on
metal sales 2 2,079 4,767 (56) 8,555
Other net
(expenditure)/income (1,482) 211 (182)
Market development
and promotional
expenditure (198) (226) (408)
Operating profit 399 4,752 (92) 7,965
IFRS 2 Charge –
community economic
empowerment
transaction — — (1,073)
(Loss)/gain on
revaluation of
investment in
Wesizwe Platinum
Limited (Wesizwe) (256) 33 33
Interest expensed (127) (135) (216)
Interest received 39 176 216
Remeasurements of 3 165 215
loans and
receivables
Losses from
associates (net of
taxation) (481) (203) (479)
(Loss)/profit before
taxation (423) 4,788 (109) 6,661
Taxation 3 (27) (1,405) (2,974)
(Loss)/profit for
the period/year (450) 3,383 (113) 3,687
Other comprehensive
income, net of
income tax
Items that will be
reclassified
subsequently to
profit or loss 186 (55) 131
Deferred foreign
exchange translation
gains 87 102 557
Share of other
comprehensive losses
of associates (2) (4) (5)
Reclassification of
unrealised losses on
available-for-sale
investment to
loss/profit 256 — —
Net losses on
available-for-sale
investments (155) (153) (421)
Total comprehensive
(loss)/income for
the period/year (264) 3,328 3,818
(Loss)/profit
attributable to:
Owners of the
Company (464) 3,328 (114) 3,591
Non-controlling
interests 14 55 96
(450) 3,383 3,687
Total comprehensive
(loss)/income
attributable to:
Owners of the
Company (278) 3,273 3,722
Non-controlling
interests 14 55 96
(264) 3,328 3,818
RECONCILIATION
BETWEEN
(LOSS)/PROFIT AND
HEADLINE EARNINGS
(Loss)/profit
attributable to
owners of the
Company (464) 3,328 3,591
Adjustments
Loss/(gain) on
revaluation of
investment in
Wesizwe 256 (33) (33)
Tax effect thereon — 3 3
Profit on sale of
other mineral rights
and investments (10) (6) (14)
Tax effect thereon — 2 —
Loss/(profit) on
disposal and
scrapping of
property, plant and
equipment 1,293 (85) 27
Tax effect thereon (362) 24 (8)
Headline earnings 713 3,233 (78) 3,566
Number of ordinary
shares in issue
(millions) 260.9 261.2 261.1
Weighted average
number of ordinary
shares in issue
(millions) 261.1 261.5 261.4
Weighted average
number of potential
diluted ordinary
shares in issue
(millions) 262.0 262.4 263.4
Earnings per
ordinary share
(cents)
– Basic (178) 1,273 (114) 1,374
– Diluted (177) 1,268 (114) 1,363
Headline earnings
per ordinary share
(cents)
– Headline 273 1,236 (78) 1,365
– Diluted 272 1,232 (78) 1,354
ABRIDGED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Reviewed Reviewed Audited
as at as at as at
30 June 30 June 31 December
2012 2011 2011
Note Rm Rm Rm
ASSETS
Non-current assets 68,076 67,206 68,971
Property, plant and 43,265 37,345 44,499
equipment
Capital work-in-progress 13,548 18,024 12,940
Investment in associates 6,632 6,917 6,870
Investments held by
environmental trusts 600 595 662
Other financial assets 3,971 4,251 3,931
Other non-current assets 60 74 69
Current assets 21,954 17,615 18,309
Inventories 16,841 12,022 12,525
Trade and other
receivables 3,368 3,347 3,066
Other assets 405 301 419
Other current financial
assets 13 21 3
Cash and cash equivalents 1,327 1,924 2,296
Total assets 90,030 84,821 87,280
EQUITY AND LIABILITIES
Shareholders’ equity 55,977 56,340 56,743
Non-current liabilities 22,787 14,439 15,430
Interest-bearing
borrowings 4 8,267 451 939
Obligations due under
finance leases — 1 —*
Other financial
liabilities 32 106 69
Environmental obligations 1,472 1,431 1,412
Employees’ service benefit
obligations 3 7 4
Deferred taxation 13,013 12,443 13,006
Current liabilities 11,266 14,042 15,107
Current interest-bearing
borrowings 4 2,602 5,822 5,019
Trade and other payables 5,986 5,939 6,762
Other liabilities 1,614 1,414 1,792
Other current financial
liabilities 258 141 183
Share-based payment
provision 62 91 76
Taxation 744 635 1,275
Total equity and
liabilities 90,030 84,821 87,280
* Less than R500,000
ABRIDGED CONSOLIDATED STATEMENT OF CASH FLOWS
Reviewed Reviewed
Six months Six months Audited
ended ended Year ended
30 June 30 June 31 December
2012 2011 2011
Rm Rm Rm
Cash flows (used in)/from
operating activities
Cash receipts from customers 18,839 24,315 51,278
Cash paid to suppliers and
employees (19,992) (18,282) (38,020)
Cash (used in)/generated from
operations (1,153) 6,033 13,258
Interest paid (net of interest
capitalised) (75) (81) (194)
Taxation paid (531) (400) (752)
Net cash (used in)/from operating
activities (1,759) 5,552 12,312
Cash flows used in investing
activities
Purchase of property, plant and
equipment (includes interest
capitalised) (3,013) (3,013) (7,504)
Proceeds from sale of plant and
equipment 17 125 276
Senior loan to Plateau Resources
Proprietary Limited (Plateau) — (669) (669)
Proceeds on disposal of interest
in Western Bushveld Joint Venture — 126 126
Loans to associates (212) (126) (263)
Advances made to Plateau for the
operating cash shortfall facility (156) (115) (242)
Other 27 103 119
Net cash used in investing
activities (3,337) (3,569) (8,157)
Cash flows from/(used in)
financing activities
Proceeds from the issue of
ordinary share capital — — 1
Share issue expenses on the
community economic empowerment
transaction — — (29)
Purchase of treasury shares for
the Bonus Share Plan (BSP) (231) (295) (387)
Proceeds from/(repayment of)
interest-bearing borrowings and
finance lease obligation 4,911 (374) (687)
Cash dividends paid (530) (1,791) (3,116)
Cash distributions to minorities (23) (133) (175)
Net cash from/(used in) financing
activities 4,127 (2,593) (4,393)
Net decrease in cash and cash
equivalents (969) (610) (238)
Cash and cash equivalents at
beginning of period/year 2,296 2,534 2,534
Cash and cash equivalents at end
of period/year 1,327 1,924 2,296
Movement in net debt
Net debt at beginning of
period/year (3,662) (4,111) (4,111)
Net cash (used in)/from operating
activities (1,759) 5,552 12,312
Net cash used in investing
activities (3,337) (3,569) (8,157)
Other (784) (2,222) (3,706)
Net debt at end of period/year (9,542) (4,350) (3,662)
ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Non-
Other Retained controlling
equity earnings interests Total
Rm Rm Rm Rm
Balance at 31 December
2010 (audited) 21,037 33,521 460 55,018
Total comprehensive
income for the period (51) 3,324 55 3,328
Deferred tax charged
directly to equity (2) (2)
Cash distributions to
minorities (133) (133)
Cash dividends paid (1,791) (1,791)
Shares acquired in terms
of the BSP – treated as
treasury shares (295) (295)
Shares vested in terms
of the BSP 12 (12) —
Equity-settled share-
based compensation 226 226
Shares purchased for
employees (11) (11)
Balance at 30 June 2011
(reviewed) 20,703 35,255 382 56,340
Total comprehensive
income for the period 187 262 41 490
Deferred tax charged
directly to equity 1 1
Transfer of deferred
taxation on prior year
translation differences
on net investment
in foreign subsidiary 21 21
Cash distributions to
minorities (42) (42)
Cash dividends paid (1,325) (1,325)
Gain on variation of
interests in associate 25 25
Issue of shares –
community economic
empowerment transaction (28) (28)
Shares acquired in terms
of the BSP – treated as
treasury shares (92) (92)
Shares vested in terms
of the BSP 37 (37) —
Equity-settled share- 1,073 1,073
based compensation –
community economic
empowerment transaction
Equity-settled share-
based compensation 299 299
Shares purchased for
employees (19) (19)
Balance at 31 December
2011 (audited) 20,828 35,534 381 56,743
Total comprehensive
income/(loss) for the
period 188 (466) 14 (264)
Deferred tax charged
directly to equity 3 3
Cash distributions to
minorities (23) (23)
Cash dividends paid (530) (530)
Shares acquired in terms
of the BSP – treated as
treasury shares (231) (231)
Shares vested in terms
of the BSP 134 (134) —
Equity-settled share-
based compensation 299 299
Shares purchased for
employees (20) (20)
Balance at 30 June 2012
(reviewed) 20,919 34,686 372 55,977
SEGMENTAL INFORMATION
Net sales revenue Operating contribution
Reviewed Reviewed Audited Reviewed Reviewed Audited
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2012 2011 2011 2012 2011 2011
Rm Rm Rm Rm Rm Rm
Operations
Bathopele Mine 964 1,165 2,284 184 323 548
Khomanani Mine 852 900 1,925 62 96 234
Thembelani 729 1,025 2,055 (12) 225 396
Mine
Khuseleka Mine 1,096 1,142 2,538 94 95 341
Siphumelele 691 864 1,865 104 139 381
Mine
Tumela Mine 1,638 2,712 5,285 197 838 1,481
Dishaba Mine 1,122 1,361 2,995 203 276 701
Union Mine† 1,666 2,613 5,126 294 694 1,062
Union North 528 1,022 1,844 33 268 338
Mine
Union South 1,138 1,591 3,282 261 426 724
Mine
Mogalakwena 3,688 4,036 8,403 1,085 1,714 3,413
Mine
Twickenham — 34 36 — 16 16
Platinum Mine
Unki Platinum 641 270 946 165 93 287
Mine
Modikwa 445 675 1,415 6 127 312
Platinum Mine
Kroondal 708 1,110 2,095 86 361 536
Platinum Mine
Marikana 195 259 544 (104) 3 42
Platinum Mine
Mototolo 428 505 1,066 120 178 329
Platinum Mine
14,863 18,671 38,578 2,484 5,178 10,079
Western Limb 322 351 753 127 129 240
Tailings
Retreatment
(WLTR)
Chrome 239 212 474 201 202 451
refining
Total – mined 15,424 19,234 39,805 2,812 5,509 10,770
Purchased 3,986 5,571 11,312 408 479 597
metals
19,410 24,805 51,117 3,220 5,988 11,367
Other costs (1,141) (1,221) (2,812)
Gross profit on metal sales 2,079 4,767 8,555
† Union Mine was successfully reorganised into two separate mines,
namely Union North Mine and Union South Mine, during 2011.
NOTES TO THE ABRIDGED CONSOLIDATED FINANCIAL STATEMENTS
1. This interim report is in accordance with the framework
concepts and the measurement and recognition requirements of
IFRS, the South African Statements and Interpretations of
Statements of Generally Accepted Accounting Practice (AC 500
Series), the requirements of the Companies Act of South Africa
and the JSE Limited’s Listings Requirements. It also contains
the information required by International Accounting Standard
34 – Interim Financial Reporting. The accounting policies are
consistent with those applied in the financial statements for
the year ended 30 December 2011.
Reviewed Reviewed
Six months Six months Audited
ended ended Year ended
30 June 30 June 31 December
2012 2011 2011
Rm Rm Rm
2. GROSS PROFIT ON METAL SALES
Gross sales revenue 19,532 24,972 51,484
Commissions paid (122) (167) (367)
Net sales revenue 19,410 24,805 51,117
Cost of sales (17,331) (20,038) (42,562)
On-mine (13,478) (11,660) (25,237)
Cash operating costs (11,794) (10,069) (21,950)
Depreciation (1,656) (1,548) (3,243)
Deferred waste stripping (28) (43) (44)
Purchase of metals and
leasing activities* (4,026) (4,355) (9,193)
Smelting (1,461) (1,305) (2,801)
Cash operating costs (1,105) (932) (2,045)
Depreciation (356) (373) (756)
Treatment and refining (1,315) (1,021) (2,316)
Cash operating costs (1,001) (826) (1,788)
Depreciation (314) (195) (528)
Increase/(decrease) in
metal inventories 4,090 (476) (203)
Other costs (1,141) (1,221) (2,812)
Gross profit on metal sales 2,079 4,767 8,555
Gross profit margin (%) 10.7 19.2 16.7
*Consists of purchased metals in concentrate, secondary metals
and other metals.
3. TAXATION
A reconciliation of the
standard rate of South
African normal taxation
compared with that charged
in the statement of
comprehensive income is set
out in the following table: % % %
South African normal
taxation (28.0) 28.0 28.0
STC 12.2 1.2 2.9
(15.8) 29.2 30.9
Disallowable items 11.0 (1.8) 3.5
Capital profits 17.0 (0.2) (0.1)
Prior-year under/(over)
provision 52.7 (2.6) 9.0
Effect of after-tax share
of losses from associates 31.8 1.9 2.0
Effective tax rate
adjustment (85.9) — —
Other (4.4) 2.8 (0.7)
Effective taxation rate 6.4 29.3 44.6*
* Increase in effective tax rate relates to various factors
including non-recurring items relating to the community
economic empowerment transaction, other non-tax deductible
expenditure and prior years’ adjustments.
4. INTEREST-BEARING BORROWINGS Rm Rm Rm
The Group has the following
borrowing facilities:
Committed facilities 20,235 21,479 20,169
Uncommitted facilities 5,301 4,739 4,805
Total facilities 25,536 26,218 24,974
Less: Facilities utilised (10,869) (6,273) (5,958)
Interest-bearing borrowings (8,267) (451) (939)
Current interest-bearing (2,602) (5,822) (5,019)
borrowings
Available 14,667 19,945 19,016
Weighted average borrowing
rate (%) 6.59 6.38 6.60
5. CONTINGENT LIABILITIES
Letters of comfort have been issued to financial institutions
to cover certain banking facilities. There are no encumbrances
of Group assets.
The Group is the subject of various claims, which are
individually immaterial and are not expected, in aggregate, to
result in material losses. In addition, at 30 June 2012, the
Company has certain unresolved tax matters. Management have
consulted with external tax and legal advisors and believe that
these matters have been appropriately treated in the results
for the six months ended 30 June 2012.
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 cost and amounts held in the
environmental trusts. At 30 June 2012, these guarantees
amounted to R2,801 million (30 June 2011: R2,682 million; 31
December 2011: R2,653 million).
6. CHANGES IN ACCOUNTING ESTIMATES FOR INVENTORY
During the current period, the Group updated 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 Precious
Metals Refinery, which takes place once every three years.
This change in estimate has had the effect of increasing the
value of inventory disclosed in the financial statements
by R1,439 million (2011: R417 million). This results in the
recognition of an after-tax gain of R1,036 million (2011:
R300 million).
7. REFINANCING OF ATLATSA RESOURCES CORPORATION (ATLATSA)
The Group and Atlatsa have concluded a binding term sheet for
the restructure, recapitalisation and refinancing of Atlatsa
and Bokoni Platinum Holdings Proprietary Limited. The detailed
terms were included in a joint announcement to shareholders on
2 February 2012. The parties are still in the process of
finalising the implementation of the refinancing transaction.
The implementation of the transaction is subject to the
fulfilment of certain conditions precedent including regulatory
approval. This transaction will be accounted for once these
conditions have been fulfilled, which is expected to take place
in the second half of 2012.
8. UNKI PLATINUM MINES INDIGENISATION PLAN
Negotiations with the Zimbabwean government regarding the
compliance of Unki Platinum Mine with the requirements of the
Indigenisation Act continue and significant progress has been
made in this regard. Anglo American Platinum is confident that
an acceptable agreement will be reached and details will be
announced once the transaction has received the necessary
approvals.
9. AUDITOR’S REVIEW
The interim report from which the abridged interim results have
been extracted has been reviewed by the Company’s auditors,
Deloitte & Touche. The review of the abridged interim results
was performed in accordance with ISRE 2410, “Review of Interim
Financial Information Performed by the Independent Auditor of
the Entity”. Their unmodified review report is available for
inspection at the Company’s registered office. Any reference to
future financial performance, included in this announcement,
has not been reviewed or reported on by the Company’s auditors.
KEY FEATURES
• Notwithstanding a 38% year-on-year reduction in fatalities,
disappointingly, 5 employees lost their lives during the first
half of 2012
• Equivalent refined platinum production up 1% year-on-year to
1.18 million ounces
• Mogalakwena’s platinum output up 9% and concentrator recoveries
improved by 15%
• Unki ramp-up continued to run ahead of schedule with equivalent
refined platinum production up by 46% year-on-year to 32,600
ounces in the first half of 2012
• Productivity increased 11% year-on-year to 6.54m2 per total
operating employee,
• Refined platinum production and sales volume down 21% and 13%
respectively due to operational difficulties experienced upon
the restart of the converter plant
• Headline earnings down 78% to R713 million on the back of lower
sales volumes and weaker average realised rhodium and nickel
prices
• Cash operating costs up 11% year-on-year to R14,478 per
equivalent refined platinum ounce on above inflation increases
in the cost of electricity, diesel, caustic soda, steel balls
and reagents
• Operating free cash flow down 155% to a net outflow of R2,622
million, leading to a significant increase in net debt to R9.54
billion and a suspension of dividend
• Review of Anglo American Platinum portfolio is continuing and is
expected to be completed by year end
SAFETY
It is with great sadness that we have to report that five of our
employees lost their lives during the period. We extend our
sincere condolences to their families, friends and colleagues. The
causes of the fatalities were moving machinery, falls of ground,
tramming and transport related incidents.
The number of lost-time injuries incurred increased by 7% year-on-
year while serious injuries incurred increased by 13% over the
same period. This resulted in a lost-time injury frequency rate
(LTIFR) of 1.36 in the first half of 2012, compared with 1.33 in
the same period in 2011. Materials handling is still the biggest
agency for most lost-time injuries.
While this increase in injuries is unsatisfactory, it is
encouraging that the management systems, engineering and
technological solutions introduced to prevent the historical
causes of injury and death, have shown remarkable results.
Increased focus on behavioural change and visible leadership also
had a positive impact on safety performance. We are pleased that
fatalities caused by falls of ground in particular have been
reduced significantly during recent years. Of the five fatalities
which occurred in the first half of this year, one was caused by
fall of ground as compared to seven in the first half of 2007.
This shows that all fatalities are preventable and gives us
continued confidence that our ultimate objective of zero harm is
attainable.
We are implementing systems and initiatives to reduce and
eliminate low energy injuries resulting from materials handling as
well as slips and falls. We have introduced automatic couplers on
all our underground locos and hoppers to eliminate the need for
people to use their hands to guide the coupling process. To
prevent finger injuries as a result of hands being caught or
crushed while lifting pipes, we have introduced a multi-tool to
assist employees in carrying pipes and elongate support, which are
traditionally major causes of finger injuries. While we also
commenced using new types of Personal Protective Equipment (PPE)
to reduce injuries, we maintain our approach of focusing on
eliminating the risk or removing the person from the risk rather
than introducing new tools or equipment.
Our Safety Strategy has four main pillars: Appropriate safety
management systems, Engineering out the Risk, Developing
appropriate behaviour, and Wellness in the Workplace. This
strategy has improved our safety performance since 2007. We have
reduced fatalities and the LTIFR by 72% and 42% respectively since
the first half of 2007. While the safety strategy is still sound,
we continue to review and adjust it to ensure that we specifically
target the recurring agencies that contribute to injuries and
fatalities. The journey to zero harm remains our key strategic
objective and we are confident that our zero harm in action
programme introduced at the end of 2011 will contribute to us
achieving this objective.
SUSTAINABLE DEVELOPMENT AND TRANSFORMATION
Anglo American Platinum has made significant progress towards
achieving its transformation objectives as envisaged by the
Minerals and Petroleum Resources Development Act (MPRDA) and the
revised Mining Charter.
Anglo American Platinum recognises the importance and impact of
sustainability on both our legal and social licence to operate.
Performance against sustainability targets is tracked on a regular
basis and it includes employee safety, employee health, compliance
with mineral policy and legislation, access to and allocation of
resources. Notable achievements in these sustainable development
issues include the following:
Employee health
• Approximately 4,000 employees on Anti Retroviral Treatment
• On track to maintain 97% Voluntary Counselling and Testing
• Work on reducing noise level of our equipment to 110 decibels
continues
Access to and allocation of resources
• Reductions in our water consumption and increase in the use of
grey and affluent water to reduce the use of potable water
• No level two or three environmental incidents during the first
half of 2012.
MPRDA and the revised Mining Charter
We are continuing to work with the DMR to resolve issues
surrounding a number of our prospecting rights that are under
contention as we believe that these rights were incorrectly
awarded to third-party entities.
The key milestones achieved in support of our Social and Labour
Plans include the following:
Average of 59% historically disadvantaged South Africans (HDSA) in
management positions (Top management 44%, senior management 41%,
middle management 57% and junior management 64%), compared to the
Mining Charter requirement of 40% per management level;
13% women in mining; While it is still a challenge to fill
underground mining positions with women, in management we have
done better: Total women in management stands at 21% with the
following spread across levels: Top management 22%, senior
management 11%, middle management 23% and junior management 22%;
HDSA procurement of R5.4 billion, up from R4.3 billion spent in
the first half of 2011, equating to 50.3% available spend with
HDSA suppliers in the first of 2012; and
Three years ago, we committed ourselves to promoting employee home
ownership and entered into a partnership with the then Department
of Housing to build 20,000 housing units for our employees. To
date 1,515 stands have been fully serviced and approximately 400
housing units have been built. An additional 500 employees have
signed up for the "rent to buy" program which will see them being
converted to homeowners within a four year period.
Following the implementation of the landmark mine host community
empowerment transaction in December 2011, Lefa La Rona Trust
received a maiden dividend and work continues to finalise the
establishment of the beneficiary development trusts.
We have a clear transformation plan which has evolved beyond the
recording of numbers to focusing on creating a “great place to
work”, and being the employer of choice. This includes creating
the right culture within the company and a focus on increasing
women participation in mining.
FINANCIAL REVIEW
Headline earnings per ordinary share decreased by 78% year-on-year
to R2.73 in the first half of 2012. This was primarily due to
lower sales volumes and weaker average realised rhodium and nickel
prices. Headline earnings per ordinary share exclude a loss of
R256 million resulting from the revaluation of the company’s
investment in Wesizwe Platinum Limited (Wesizwe) and non-recurring
R388 million for the writedown of Tumela 4 shaft and R505 million
for the writedown of Marikana following the decision to place the
mine on care and maintenance. Tumela 4 shaft infrastructure is not
viable in the current economic and operating environment. Headline
earnings for the first half of 2011 excluded approximately R95
million of gains from the profit on disposal of assets and
revaluation of the company’s investment in Wesizwe.
Gross sales revenue decreased by 22% to R19.53 billion. R4.33
billion of the decrease in gross revenue was due to lower sales
volumes and R1.11 billion was due to lower average realised
prices. Refined platinum sales for the six months ended 30 June
2012 decreased by 21% to 967,400 ounces compared to the first half
of 2011. This was due to lower refined platinum production volume,
which declined by 13% as a result of operational difficulties
experienced upon the restart of the converter plant post annual
maintenance.
The average dollar basket price achieved declined by 13% from
US$2,927 per ounce in the first half of 2011 to US$2,532 per
ounce. However, the average exchange rate achieved on sales during
the first half of 2012 was R7.94, 15% weaker compared to R6.90 in
the first half of 2011. As a result, the realised average Rand
basket price in the first half of 2012 was R20,086 per platinum
ounce, in line with the basket price of R20,194 in the same period
in 2011.
Cost of sales decreased by 14% year-on-year to R17.33 billion in
the first half of 2012 primarily due to a R4.57 billion movement
in metal inventory. The normal inventory revaluation accounted for
R2.65 billion of the increase in metal inventories while the
adjustment arising following the physical stock count accounted
for R1.44 billion. The larger pipeline stock at our Waterval and
Polokwane smelters is attributable to the extended maintenance
shutdown of the converter plant which resulted in high levels of
furnace matte. This was partly offset by a R2.07 billion increase
in cash operating costs.
Cash operating cost per equivalent refined platinum ounce
increased by 11% to R14,478 primarily due to increases in the cost
of labour, electricity, diesel, caustic soda, process chemicals,
steel balls and reagents. Mining inflation, as measured by mining
producer price index averaged 8% in the first half of 2012 while
the cost of electricity and electrical components increased by
20%, diesel rose by 28%, caustic soda grew by 33% and labour
increased by 10% over the same period. The impact of the higher
costs was partly offset by a 3.6% increase in mined output, asset
optimisation efficiencies and supply chain savings. Cash
operating cost per equivalent refined platinum ounce at R14,478 is
only 2.9% higher than the R14,066 seen the second half of 2011.
The costs are more aligned between the two halves as we normally
implement salary increases to unionised labour in July and to
management in January.
Our cost management initiatives also focused on improving labour
productivity during the period. Productivity, measured as square
meters per total operating employee per month, averaged 6.54m2 in
the first half of 2012 compared to 5.88m2 in first half of 2011,
an increase of 11%. Labour productivity of our underground mines
benefited from improved safety performance, increased development
resulting in more available mineable reserves and the absence of
union related disruptions.
Operating profit decreased by 92% to R399 million from R4,752
million in the first half of 2011. As a result, operating margin
declined from 19% in the first half of 2011 to 2% in during the
period under review. The cumulative effect of lower sales volumes,
weaker average realised rhodium and nickel prices and higher cost
have led to below average operating margins and a significant
decline in operating cash flow. Operating free cash flow decreased
by R7.37 billion compared to the first half of 2011 to a net
outflow of R2,622 million. The 109% increase in net working
capital days also had a negative impact on operating free cash
flow. This was despite continued improvement in capital discipline
and related mainly to an increase in pipeline metal inventories.
In line with a decline in operating free cash flow, net debt
increased by 161% to R9.54 billion from R3.66 billion at the end
of December 2011. The strength of the balance sheet was negatively
impacted by this as gearing increased from 11% in 2011 to 19% at
the end of June 2012. As a result, no interim dividend has been
declared. Anglo American Platinum is better positioned to manage
the current operational and market challenges as our gearing is
significantly lower than the 56% level seen in 2008. This reflects
positively on the effectiveness of the restructuring initiatives
implemented between 2008 and 2010 which improved the company’s
capital structure and cash generation over the last three years.
MARKETS
Global demand for platinum during the first half of 2012 was
marginally weaker than expected as firmer jewellery demand,
stimulated by current depressed price levels, was unable to offset
weak autocatalyst and investment demand. Industrial demand for
platinum remained flat as expected.
Labour and safety related stoppages in South Africa reduced
planned supply of refined platinum from South Africa in the first
half of 2012 and low operating margins increased the likelihood of
further reductions in the second half. Despite the reduction in
supply forecasts for 2012, metal investment sentiment and prices
remain poor.
Palladium demand remained firm as growth in demand for gasoline
vehicles continues. Expectations of a deficit market resulted in
firmer price levels albeit at levels below the value-in-use of the
metal. Rhodium demand remained weak as significant reversal of
substitution implemented during excessive price levels remains
unlikely.
Autocatalysts
Ongoing economic uncertainty in Europe continued to impact demand
for new vehicles with sales approximately 7% below those in the
first half of 2011. Demand for platinum in autocatalysts in Europe
is 47% of global autocatalyst platinum demand, albeit that the
reduction in vehicle sales does not directly result in a reduction
in platinum demand. Platinum loading per catalyst, particularly in
light duty diesel vehicles in Europe, continues to increase ahead
of the Euro 6 emissions limits commencing in September 2014. Over
the past 12 months and more particularly during the first half of
2012, several more vehicle manufacturers finalised their
technology choices necessary to comply with Euro 6. This improved
the accuracy of forecasting the increase in loadings that will
occur between now and September 2015.
Supply of platinum and palladium from recycled autocatalysts
increased at a slower rate than in 2011 as the distortions that
resulted from scrap incentive schemes have largely worked their
way out of the supply system.
Industrial
Gross platinum demand for industrial applications was not expected
to increase in 2012. The record demand in 2011, addressing delayed
consumption, was unlikely to be repeated. Indications in 2012 are
that industrial demand is flat with potential for further weakness
in the second half.
Jewellery
Jewellery demand remained firm during the first half of the year
with China benefiting most from the current low price; strong
demand from manufacturers on price dips also continued. Improved
confidence in platinum jewellery by Chinese and Hong Kong retail
brands has resulted in increased platinum stock levels in existing
and newly opened stores. Platinum jewellery demand continues to
benefit from platinum trading at a discount, of over $100/oz, to
gold.
Investment
Platinum investment demand in the first half of 2012 remained
muted as ongoing macro-economic uncertainty maintained negative
investor sentiment. Lack of clarity regarding the response of
South African producers to the current perceived oversupply
compounds this sentiment. Reduced participation in non-visible or
over-the-counter metal trade continues to depress prices which in
turn reduce demand for ETF’s.
OPERATIONS
Refined platinum production decreased by 13% to 1.03 million
ounces in the first half of 2012 compared to the same period in
2011 despite higher output from mining operations. This was due to
planned annual maintenance at the converter plant in Rustenburg,
which was completed by the end of March 2012. Operational and
equipment related difficulties experienced upon the restart of the
converter plant negatively impacted production throughput.
However, those difficulties have been resolved and the furnace
matte converted in June 2012 exceeded the previous monthly record
by 5%. We expect the delayed equivalent refined production to be
processed by the end of the third quarter of 2012 as the converter
plant reached steady state operating level.
Equivalent refined platinum production (equivalent ounces are
mined ounces expressed as refined ounces) from the mines managed
by Anglo American Platinum and its joint venture partners for the
half year ended 30 June 2012 was 1.18 million ounces, an increase
of 1% compared to the same period in 2011.
Equivalent refined platinum production from own mines (including
Western Limb Tailings Retreatment) increased by 39,500 ounces or
5% year-on-year to 802.6 koz in the first half of 2012. Platinum
production at Rustenburg mines (Bathopele, Khuseleka, Khomanani,
Siphumelele and Thembelani) increased by 42.9 koz or 17% year-on-
year. Year-on-year increases in output were also recorded at
Dishaba, Union South, and Unki Mines. This improvement in
underground mines performance was due to increased development
resulting in more mineable reserves, a significant reduction in
the scope and duration of regulator imposed safety stoppages,
successful ramp-up of Khuseleka 2 shaft and productivity
improvements. Mogalakwena mine output was 160.2 koz platinum
ounces, up 9% year-on-year due to improved concentrator
recoveries. The increased performances were partly offset by lower
production volumes from Union North, Thembelani and Tumela mines.
Equivalent refined platinum production from joint ventures and
associates, inclusive of both mined and purchased production net
of concentrate sold, was down 2% year-on-year at 347,600 koz. All
operations were impacted by regulatory stoppages and Modikwa mine
was subjected to a prolonged industrial strike in which almost a
month’s production was lost. Equivalent refined platinum ounces
purchased from third parties decreased by 39% from 43,300 to
26,600 ounces in the first half of 2012.
Anglo American Platinum’s share of tonnes milled for the first
half of 2012 increased by 3% to 21.0 million while the overall 4E
built-up head grade was 3.15g/t compared with 3.16g/t in the first
half of 2011.
OWN MINES
Anglo American Platinum had a good start to the 2012 financial
year, with improved safety and operational performances from
underground mines. The safety stoppages at our own mining
operations were more localised and for a shorter period and as a
result, 14,321 ounces of platinum, compared with 48,342 in the
first half of 2011, were lost due to non fatality related safety
stoppages. Underground mining performance improved with a 14%
increase in square metres mined due to improved productivity,
significant increase in development creating more mineable
reserves and the improved safety performances. Tonnes milled from
underground sources were up 13% at 9.9 million tonnes. Surface
material tonnes milled reduced by 44% due to depletion at both
Tumela and Union North mines. The improved underground
performances were further underpinned by a 15% increase in
recovery at Mogalakwena concentrators. Although concentrator ounce
lock ups resulting from operational challenges at Amandelbult
(Tumela and Dishaba) concentrators had a negative impact on
throughput, equivalent refined production increased by 5% to 802.6
koz.
Individual operational performances were as follows:
Bathopele
Bathopele mine achieved 649,000 fatality-free shifts in the first
half of 2012. The lost-time injury frequency rate improved to
0.39 in the first half of 2012 from the 0.70 achieved during the
first half of 2011.
Equivalent refined platinum production increased by 15% to 64,500
ounces in the first half of 2012 as a result of a 12% increase in
square metres mined, 21% increase in tonnes milled and 13%
improvement in labour productivity.
Khomanani
Khomanani mine achieved 897,000 fatality-free shifts during the
first half of 2012. The lost-time injury frequency rate improved
to 1.46 in first half of 2012, down from 1.67 in the first half of
2011.
Output of equivalent refined platinum production increased by 28%
to 56,600 ounces primarily due to improved safety and operational
performances. Square metres mined and tonnes milled increased by
30% while labour productivity improved by 19%.
Thembelani
Thembelani mine had no fatalities in the first half of 2012 and
has achieved 1,280,000 fatality-free shifts. The lost-time injury
frequency rate, however, deteriorated to 2.78 during the first
half of 2012 from 2.08 in the first half of 2011. To counter this
deterioration, the annual “safe start” process was again
undertaken in May 2012 where every employee was taken out of the
mine for a day and given safety refresher training.
Equivalent refined platinum production was marginally lower at
47,800 ounces, down 1% year-on-year. Square metre output increased
by 2%, tonnes milled remained unchanged and the 4E built-up head
grade improved by 3%. Productivity was 3% lower at 5.9m² per
employee.
Khuseleka
Disappointingly, two employees lost their lives at Khuseleka mine
during the first half of 2012. The lost-time injury frequency rate
deteriorated to 2.12 in the first half of 2012 from the 1.61
achieved in 2011. To counter this unsatisfactory safety
performance, we have made management changes following the
fatalities and implemented initiatives and systems to ensure that
the employees respond appropriately to high risk conditions.
Production at 72,300 equivalent refined platinum ounces was up 32%
in the first half of 2012 compared to 2011 as a result of a
successful ramp up of Khuseleka 2 shaft and improved operating
performance. Although the head grade declined marginally by 2%,
square metres mined increased by 26% year-on-year, tonnes milled
grew by 35% and labour productivity improved by 22%. Khuseleka 2
shaft produced 18,161 ounces of platinum in the first half of
2012, up 149% compared to 7,282 ounces produced in the first half
of 2011.
Siphumelele
Siphumelele mine achieved 1,560,000 fatality-free shifts during
the first half of 2012. The lost-time injury frequency rate
deteriorated to 3.15 from 2.94 reported in the first half of 2011.
Safety remains a key focus and management action plans are in
place to improve safety performance at this operation.
Equivalent refined platinum production increased by 8% to 46,700.
Square metres mined increased by 10%, 4E built-up head grade
improved by 2% while labour productivity increased by 19%. Tonnes
milled from low grade surface material declined by 9%.
Tumela
Tumela mine achieved 1,300,000 fatality-free shifts in during the
first half of 2012. The lost-time injury frequency rate
deteriorated to 1.95 in the first half of 2012 compared to the
1.86 achieved in the same period in 2011.
The equivalent refined platinum production decreased by 20% to
107,100 ounces principally due to the depletion of low grade
surface material sources and declining Merensky production and
concentrator ounce lock ups resulting from operational challenges
at the Amandelbult concentrators. Square metres mined were 7%
lower year-on-year principally due to lower Merensky mining while
UG2 production was flat. Tonnes milled from underground sources
decreased by only 3% year-on-year despite accumulating 120,000
tonnes of ore at the concentrator. The lower built-up head grade
was a direct consequence of the operational challenges at the
Amandelbult concentrators.
Dishaba
Dishaba mine had no fatalities in the first half of 2012 and has
achieved 588,000 fatality-free shifts. The lost-time injury
frequency rate improved to 1.02 in the first half of 2012 compared
with 1.69 in the same period in 2011.
Equivalent refined platinum production at 73,300 ounces was 9%
higher than that achieved in the same period in 2011 as a result
of productivity improvements and an improved safety performance.
Square metres mined increased by 26% year-on-year, tonnes milled
increased by 22%, labour productivity improved by 25%.The decrease
in grade was caused by the operational challenges at the
Amandelbult concentrator.
Union North
Regrettably, Union North Mine had one fatality for the first half
of 2012. The lost-time-injury frequency rate for Union North mine
improved to 1.23 in the first half of 2012 from 1.67 in the same
period in 2011.
The equivalent refined platinum production decreased by 24% to
37,400 ounces during the first half of 2012. This was due to the
depletion of low grade surface material sources and the expected
decline in Merensky ore mining which resulted in square metres
mined declining by 4% year-on-year. Tonnes milled decreased by 38%
while 4E built-up head grade improved by 29% as a result of a
significant decline in processing of lower grade surface material.
Surface material tonnes milled declined by 64% to 322,000 tonnes
in the first half of 2012. Productivity remained unchanged year-
on-year.
Union South
Union South mine had no fatalities in the first half of 2012 and
has achieved 1,565,000 fatality-free shifts. The lost-time-injury
frequency rate improved to 1.22 during the first half of 2012 from
1.72 in the same period in 2011.
Production at 79,900 equivalent refined platinum ounces was up 4%
in the first half of 2012 compared to the same period in 2011 due
to a 5% increase in square metres and 13% increase in tonnes
milled, partly offset by a decline in 4E built-up head grade due
to increased mining of UG2 ore. Productivity increased by 2% year-
on-year.
Mogalakwena
Regrettably, one employee was fatally injured on 11 June 2012, in
a moving machinery related incident. The lost-time injury
frequency rate deteriorated to 0.86 compared with 0.48 in the
first half of 2011. The mine is focusing on its connectivity
programme to reduce the number of injuries.
Equivalent refined platinum production increased to 160,200
ounces, up 9% compared to the first half of 2011 despite a 2%
decline in tonnes milled and a 4% decrease in 4E built-up head
grade. The increase in production was primarily due to a 15%
improvement in concentrator recoveries. The throughput constraints
previously experienced at the North concentrator have been
resolved and the plant is now running at steady state level.
Unki
Unki mine had no fatalities in the first half of 2012 and has
incurred zero lost-time injuries.
Equivalent refined platinum production increased by 46% year-on-
year to 32,600 ounces in the first half of 2012. The mine exceeded
its ramp up schedule and reached steady state production level a
year ahead of schedule. Square metres mined and tonnes milled
increased by 73% and 26% year-on-year respectively while head
grade improved by 7% and labour productivity increased by 4%.
JOINT VENTURE AND ASSOCIATE MINES
Equivalent refined platinum production from joint ventures and
associates, inclusive of both mined and purchased production, net
of concentrate sold, was down 2% year-on-year at 348 koz. This was
largely as a result of lower production at Kroondal, Modikwa and
BRPM operations. Production at these operations was negatively
impacted by fatal accidents during the first half of 2012 and
prolonged industrial action over wage negotiations at Modikwa. The
production loss was partly offset by improved output at Bokoni and
Mototolo operations.
JOINT VENTURE MINES
Modikwa
Regrettably, two employees lost their lives at Modikwa in a fall
of ground incident in January, after the mine reached an
unprecedented 8.9 million fatally-free shifts. Production
decreased by 10% year-on-year to 50,400 equivalent refined
platinum ounces compared with the first half of 2011. The decrease
in production was largely attributable to a prolonged industrial
strike over wage negotiations in which approximately 11,000
equivalent refined platinum ounces were lost and a 5 day section
54 stoppage following the multiple fatal incident.
Mototolo
Production increased by 7% to 58,400 equivalent refined platinum
ounces compared to the first half of 2011. This was due to a 6%
increase in tonnes milled due to a good operational performance.
Square metres mined increased by 4% and labour productivity
increased by 23% to 16.5 square metres per employee.
Kroondal
Disappointingly, one employee lost his life in a fall of ground
incident in April. Production was down 12% to 96,600 equivalent
refined platinum ounces compared to the first half of 2011. The
decrease in production was largely attributable to an increase in
the number of Section 54 stoppages in the first half of 2012 and
operational challenges resulting from the ongoing change of ground
support standard at the mine. Kroondal is being converted to an
owner operated mine over a 6 month transition period ending in
December 2012, following the mutually agreed termination of the
Murray & Roberts Cementation contract.
Marikana
Mine production was flat year-on-year but equivalent refined
platinum ounces attributable to Anglo American Platinum increased
by 59% to 26,400 compared to the first half of 2011. The increase
was due to the culmination in sales to Impala Refining Services in
2011, in terms of the Marikana offtake agreement. Marikana 5 Shaft
and Siphumele 3 were placed on care and maintenance on 1 April
2012 and the remaining 4 Shaft and the concentrator plant were
subsequently placed on care and maintenance effective 23 June 2012
due to the low PGM price environment.
ASSOCIATE MINES
BRPM
Regrettably, one employee lost his life in a fall of ground
incident in February. Production decreased by 9% to 82,200
equivalent refined platinum ounces during the first half of 2012
principally due to safety related stoppages and increased turnover
of Rock Drill Operators as a result of industrial action at
neighbouring mines.
Bokoni
Disappointingly, one employee was fatally injured in a fall of
ground incident at Vertical Shaft in February. Production for the
first half of 2012 increased by 26% to 33,600 equivalent refined
platinum ounces compared with the first half of 2011. This
increase is largely attributable to operational improvements
implemented at the mine. There was a 5% increase in 4E built-up
head grade and an improvement in concentrator recoveries to 88%
from 82% during the first half of 2011.
CAPITAL EXPENDITURE PROJECTS
Our capital projects division has achieved a record 1,254 fatality
free days. A major safety focus is ensuring projects are set up
in line with the company safety management system and standards.
Capital expenditure for the first half of 2012, excluding
capitalised interest, amounted to R2,828 million, which is in line
with the same period in 2011. Stay-in-business capital expenditure
was R1,158 million – R208 million higher than in the first half of
2011. Waste stripping capital expenses at our Mogalakwena Mine
decreased to R311 million in the first half 2012 from R338 million
in the first half of 2011. Project capital expenditure was R1,359
million, down 12% or R180 million from the 2011 figure. Interest
capitalised was R185 million, which is in line with the same
period in 2011.
The majority of the project capital expenditure for the first half
of 2012 was invested on the Twickenham Platinum Mine, Unki Mine
and the Khuseleka Ore Replacement Project.
The Twickenham Platinum Mine achieved 1,673 fatality free days.
Current major work includes declines and primary developments.
The Bathopele 5 and Slag Cleaning Furnace 2 Projects have recently
entered implementation phase and are progressing on schedule.
The Thembelani 2 project has been stopped and a co-extraction
project study of the resource is currently underway, with a
scheduled completion period of 3 years.
Anglo American Platinum continues to prioritise capital projects
and stay-in-business expenditure to ensure that capital funding
requirements are aligned with our strategy.
MINERAL RESOURCES AND RESERVES
There have been no material changes to the ore reserves as
disclosed in the 2011 Annual Report.
BOARD AND EXCO CHANGES
Thomas Wixley retired as a non-executive director on 30 March
2012. On 30 June 2012, the Company Secretary, Sarita Martin,
resigned from the company. The process to find a successor is
ongoing.
Neville Nicolau resigned with immediate effect on 19 July 2012 as
Chief Executive Officer (“CEO”) of the Company. The Board of Anglo
American Platinum Limited has appointed Chris Griffith as the
company’s new CEO with effect from 1 September 2012. In the
interim period until 1 September 2012, Bongani Nqwababa, Finance
Director of Anglo American Platinum, will fulfil the role of CEO.
Khanyisile Kweyama, Executive Head of Human Resources, was
appointed as Executive Director of Anglo American South Africa
with effect from 1 September 2012. The process of finding her
replacement has commenced.
STRATEGIC REVIEW AND OUTLOOK
Anglo American Platinum believes that global platinum supply is
likely to exceed demand in the short term. There is, however,
potential for further reduced supply from South Africa, possibly
coupled with improved sentiment and increased investment demand,
which could move the market into balance. The current depressed
price has reduced operating margins and consequently capital
investment in sustaining current and increasing future production
has reduced significantly. While the market may be in surplus in
the short term, we believe that global demand growth will not be
matched by supply growth with material deficits likely in the
medium to long term. Anglo American Platinum, with its superior
asset base in terms of extent and reef type, is well positioned to
adjust project prioritisation and scheduling to match future
demand.
Despite the current short term challenges, Anglo American Platinum
believes that the longer term supply demand outlook for the
platinum business remains attractive. Although platinum demand
growth typically follows global GDP, it is enhanced by demand for
additional metal required to meet tightening vehicle emissions
legislation and demand for metal used in variety of new
applications. Long term matching of supply to demand is aided by
the short term response of price elastic jewellery demand which
reduces the extent to which short term supply needs to respond to
short term changes in demand.
The exceptionally wide variety of industrial applications for
platinum results in numerous applications being at different
points in demand maturity. Consequently, the overall growth in
industrial demand is more similar to global GDP growth than demand
growth in any particular application. Platinum demand growth in
autocatalysts has a component of demand related to GDP. However,
tightening emissions legislation and the associated selection of
technology to achieve the required emissions levels continues to
drive overall demand growth. Price elastic jewellery demand is
effective in providing metal to industrial applications at high
prices and providing additional demand at low prices.
The key objective of the strategic review is to thoroughly assess
the options available to establish a long term portfolio with
sustainable competitive advantage that will deliver superior
through the cycle value for shareholders and stakeholders. We are
reviewing the entire value chain, from overhead and indirect
costs, resources to mining to processing, marketing and commercial
strategy, as well as the shape and size of portfolio which will
leverage our industry leading resource base.
Since we announced the in-depth strategic review, the operating
environment has deteriorated further. The rand basket price is
under pressure due to the weaker global economic environment,
mining inflation has remained well above the South African
consumer price index, labour unrest linked to the formation of a
new union has presented new challenges and safety related
stoppages remain a challenge for some of our peers.
While the portfolio review, aimed at delivering superior returns
through the cycle, is continuing and will be completed by the end
of the year, Anglo American Platinum management is targeting a
number of areas of short-term action in response to market
conditions.
We have taken swift and disciplined measures to preserve our
balance sheet position in light of the challenging environment.
Anglo American Platinum, together with its joint venture partner,
has suspended production at Marikana mine and placed the operation
on care and maintenance. We are engaging with our JV partners and
reviewing all options for the balance of our JV portfolio.
We are also reviewing our project portfolio to ensure effective
capital allocation and appropriate prioritisation of projects. In
February, we announced a cut in our 2012 capital expenditure
target from R9 billion to R8 billion. In light of the continued
market volatility and uncertainty, we are further reducing this by
another R700 million to up to R7.3 billion for the full year. We
will also continue to focus on asset optimisation and supply chain
management as well as increasing production from lower cost mines
like Mogalakwena.
In order to ensure organisational effectiveness and efficiency,
Anglo American Platinum has also embarked on a programme to review
overhead structures and costs across the entire organisation. This
review is intended to ensure that our overhead structures are
appropriately supporting the operations. It is an imperative to
review current ways of working, and ensure that the organisation
is best structured for the future.
Anglo American Platinum’s review of its marketing and commercial
strategy has identified numerous opportunities to better match its
product offering to the needs of current and potential customers
and improve its market intelligence and market development
initiatives. We expect to see incremental benefits develop over
the next 2 years with further details of improvements communicated
once contractually in place.
Anglo American Platinum has actively participated in the joint
initiatives, established as a task team by the Department of
Mineral Resources and the Mining Industry Growth and Development
Task Team (MIGDETT). Industry recommendations on joint
interventions with government to alleviate the current crisis
faced will be vigorously explored.
Also in February, we guided the market that we would be targeting
reduced refined production levels of between 2.5 and 2.6 million
ounces of platinum for 2012, dependent on market conditions, and
down from previous guidance of 2.7 million ounces of platinum. As
a result of further market deterioration, we are reducing our
refined production target for 2012 further to between 2.4 and 2.5
million platinum ounces, but will continue to monitor market
conditions closely with a view to reacting to further soft market
demand or take advantage of any upturns in demand in the short-
term.
As highlighted in February, the unit cost guidance for 2012, of
between R14,000 and R14,500 per equivalent refined platinum ounce,
was based on production levels of 2.6 million ounces of platinum.
Given the high fixed cost nature of the business and ongoing input
cost inflation, offset by cost-cutting efforts by management
highlighted above, we believe that unit cash costs for the full
year will be able to be contained to R15,000 per equivalent
refined platinum ounce, taking into account the lower production
levels guided above. This achievement would mean that unit costs
will have been contained to an increase of up to 11% over 2011
levels, reflecting high input costs.
The Company is expecting to conclude the restructuring and
refinancing of Atlatsa Resources Corporation (formerly Anooraq
Resources Corporation) and the implementation of Unki
Indigenisation plan in the second half of the year.
Johannesburg, South Africa
23 July 2012
CONSOLIDATED STATISTICS*
Supplementary information
Six months Six months
ended ended Year ended
30 June 30 June 31 December
TOTAL OPERATIONS 2012 2011 2011
Marketing
Average market prices
achieved
Platinum US$/oz 1,547 1,782 1,707
Palladium US$/oz 655 775 735
Rhodium US$/oz 1,390 2,266 2,015
Gold US$/oz 1,659 1,462 1,556
Nickel US$/lb 8.08 11.55 10.50
Copper US$/lb 3.63 4.20 4.04
US$ basket price – Pt
(net sales revenue US$/oz
per Pt oz sold) Pt sold 2,532 2,927 2,698
US$ basket price – PGM
(net sales revenue US$/oz
per PGM oz sold) PGM sold 1,332 1,552 1,510
Platinum R/oz 12,264 12,275 12,426
Palladium R/oz 5,197 5,345 5,322
Rhodium R/oz 11,086 15,806 14,642
Gold R/oz 13,264 10,006 11,504
Nickel R/lb 64.35 79.91 75.42
Copper R/lb 29.03 29.08 29.02
R basket price – Pt
(net sales revenue R/oz Pt
per Pt oz sold) sold 20,086 20,194 19,595
R basket price – PGM
(net sales revenue per R/oz PGM
PGM oz sold) sold 10,569 10,712 10,968
Exchange rates
Average exchange rate
achieved on sales ZAR/US$ 7.9354 6.8997 7.2625
Exchange rate at end of
the period/year ZAR/US$ 8.1902 6.7766 8.1055
Ratio analysis
Gross profit margin (%) 10.7 19.2 16.7
Operating profit as a %
of average operating
assets 1.3 17.9 14.0
Return on average
shareholders’ equity (%) (1.6) 12.2 6.6
Return on average
capital employed (%) (0.3) 15.0 12.5
Current ratio 1.9:1 1.3:1 1.2:1
Debt:equity ratio 1:5.2 1:9.0 1:9.5
Interest cover – EBITDA 8.7 25.1 23.1
Debt coverage ratio (0.1) 1.0 2.2
Net debt to capital
employed (%) 14.6 7.2 6.1
Interest-bearing debt to
shareholders’ equity (%) 19.4 11.1 10.5
Net asset value as a %
of market capitalisation 42.8 34.1 39.6
Effective tax rate (%) 6.4 29.3 44.6
Unit cost performance
Cash operating cost per
equivalent refined
Pt ounce1 R 14,478 12,991 13,552
Cash operating cost
per refined Pt ounce R 17,530 12,818 12,869
Cost of sales per total
Pt ounce sold2 R 17,915 16,284 16,306
Equivalent refined
platinum production 000 oz 1,176.8 1,160.1 2,410.1
Pipeline stock
adjustment 000 oz 137.9 35.5 35.5
Refined platinum
production (excl toll
refined metal) 000 oz (994.6) (1,173.6) (2,530.1)
Mining 000 oz (773.4) (892.4) (1,943.4)
Purchases of
concentrate 000 oz (221.2) (281.2) (586.7)
Platinum pipeline
movement 000 oz 320.1 22.0 (84.5)
* Not reviewed or audited.
¹ Cash operating cost per equivalent refined platinum ounce
excludes ounces from purchased concentrate and associated costs.
² Total platinum ounces sold = refined platinum ounces sold plus
platinum ounces sold in concentrate.
Anglo American Platinum Limited and its subsidiaries
(Anglo American Platinum)
Incorporated in the Republic of South Africa
Date of incorporation 13 July 1946
Registration number: 1946/022452/06
JSE code: AMS ISIN: ZAE000013181
Directors
Executive directors
NF Nicolau (Chief Executive Officer) (Resigned 19 July 2012)
B Nqwababa (Finance Director and Interim Chief Executive Officer)
Non-executive directors
CB Carroll (Chairman)1, BR Beamish, GG Gomwe2, R Médori3
Independent non-executive directors
MV Moosa (Deputy Chairman and Lead Independent Non-executive), RMW
Dunne4, A Kekana, Dr BA Khumalo
WE Lucas-Bull, SEN Sebotsa
1American 2Zimbabwean 3French 4British
Company secretary
S Martin (Resigned 30 June 2012)
Registered office
55 Marshall Street, Johannesburg 2001
PO Box 62179, Marshalltown 2107
Telephone +27 (11) 373 6111
Facsimile +27 (11) 373 5111
+27 (11) 834 2379
Investor relations
Kgapu Mphahlele
Telephone +27 (11) 373 6239
Email kgapu.mphahlele@angloamerican.com
Registrars
Computershare Investor Services Proprietary Limited
Registration number: 2004/003647/07
70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
South Africa
Telephone +27 (11) 370 5000 Telefax +27 (11) 688 5200
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
The 2012 interim report will be posted to shareholders
on or about 3 August 2012.
Detailed results are available on the internet at:
www.angloamericanplatinum.com
Date: 23/07/2012 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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