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Anglo American Platinum quarterly review and production report for the period 01 July 2012 to 30 September 2012
ANGLO AMERICAN PLATINUM LIMITED
Incorporated in the Republic of South Africa
Registration number 1946/022452/06
Share code: AMS
ISIN: ZAE000013181
(“Anglo American Platinum” or “the Company”)
ANGLO AMERICAN PLATINUM LIMITED QUARTERLY REVIEW AND PRODUCTION REPORT
FOR THE PERIOD 01 JULY 2012 TO 30 SEPTEMBER 2012
KEY FEATURES
• Fatality free operations in the third quarter of 2012
• 42 koz of equivalent refined platinum production lost, with consequential 8% increase in
unit cash operating cost, due to illegal industrial action during the quarter
• Improved operational performance provided minimal offset , with total equivalent refined
platinum production down 40 koz or 6% year on year, to 626 koz in the third quarter of 2012
• Unki’s production increased by 20% year on year
• Refined platinum production was flat year on year at 649 koz and up 4% quarter on quarter
due the successful ramp up of the converter plant, following scheduled maintenance earlier
in the year
• Production and costs for the remainder of 2012 will be impacted by the ongoing illegal
industrial action
REVIEW OF THE QUARTER
THE ILLEGAL STRIKE
Anglo American Platinum has been experiencing illegal industrial action at its Rustenburg
(Bathopele, Khuseleka, Khomanani, Siphumelele, and Thembelani) mining operations since 18
September 2012, following the initial safety suspension on 12 September, and the subsequent
resumption of operations. The strike was initially contained to the Rustenburg mining operations,
but has since commenced at Union (North and South) and Amandelbult (Tumela and Dishaba)
operations as of the first week of October.
The company had previously experienced an isolated illegal industrial action by around 600 miners
around its Rustenburg mining operations in July 2012. This earlier isolated strike was resolved
within a week but resulted in a loss of 9 koz equivalent refined platinum production.
Joint ventures and associates operations have also experienced illegal industrial action since 14
September 2012. Certain joint venture operations have managed to resolve the industrial action
within a short period while others continue to be impacted. This illegal industrial action has resulted
in a loss of 2 koz equivalent refined platinum production for Anglo American Platinum in the third
quarter and an additional 9 koz from 01 October 2012 to 24 October 2012.
Anglo American Platinum confirms that as a result of the illegal industrial action, in July as well as
September 2012, and the initial safety suspension, total lost platinum production, including from
joint ventures and associates, has amounted to 42 koz in the third quarter of 2012 and an
additional 96 koz from 01 October 2012 to 24 October 2012. The production losses have also
resulted in an additional 8% increase in unit cash operating cost in the third quarter of 2012, due to
the retained fixed cost base. The average loss of platinum production is 4,500 ounces per day
(3,800 ounces for own mines).
OPERATIONS
The equivalent refined platinum production (equivalent ounces are mined ounces expressed as
refined ounces) for the third quarter of 2012 decreased by 6% year on year to 626 koz, from 667
koz during the third quarter of 2011.
Production from own operations was 425 koz, down 21 koz or 5% year on year mainly due to the
illegal industrial action. Year on year increases in production were recorded at Dishaba, Unki,
Khomanani and Bathopele mines but were offset by lower production from Union North and South,
Mogalakwena, Tumela and Siphumelele mines.
Platinum production at Dishaba and Khomanani mines increased by 22% and 13% respectively
due to increases in tonnes milled as a result of a significant reduction in the scope and duration of
regulator imposed safety stoppages and higher head grades. Unki mine exceeded its ramp up
schedule and, as a result, platinum output at the mine increased by 20% year on year. Platinum
production at Rustenburg mines was 148 koz, down only 0.3% year on year and up 2% quarter on
quarter despite losing 40 koz during the third quarter due to the illegal strikes.
Platinum production at Union North and South mines declined by 23% and 26% respectively due to
lower grades caused by a decline in Merensky ore mined, the replacement of surface material with
lower grade tailings tonnes, a fall of ground at Union North mine’s Richard shaft and a shortage of
stope-able face at both mines caused by developing and equipping challenges. Mogalakwena
production was lower compared to 3Q 2011 production due to lower throughput as a result of the
breakdown of the primary crusher at the North concentrator and lower head grade.
The impact of safety stoppages on our underground mines reduced significantly during the quarter
following positive joint and pro-active effort from our management, Government and the workforce.
We experienced 7 safety stoppages at our own mining operations during the third quarter of 2012,
compared with 16 in the third quarter of 2011 and 22 in the second quarter of 2012. The safety
stoppages experienced during the quarter were more localised and were addressed over shorter
periods than in prior periods. As a result, only 650 ounces of equivalent refined platinum production
were lost due to safety stoppages in the third quarter of 2012, compared to 28,050 ounces in the
third quarter of 2011.
Equivalent refined platinum production from joint ventures and associates, inclusive of both mined
and purchased production was down 7% year on year at 184 koz. Marikana, which was placed on
care and maintenance in June 2012, accounted for 6% of the year on year decline in production.
The impact of the truck driver strike, unprotected industrial action and transition to owner mining
and a new support regime at Kroondal collectively accounted for the remaining 1% of the year on
year production decline. The change to a new operating regime at Bokoni continues to generate
positive performance and resulted in a 13% year on year improvement in production. Equivalent
refined platinum ounces purchased from third parties decreased by 22% year on year from 22 koz
to 17 koz in the third quarter of 2012.
Refined platinum production at 649 koz, increased by 0.4% year on year and by 4% quarter on
quarter, primarily due to the successful ramp up of the converter plant after resolving difficulties
experienced post its annual maintenance.
GUIDANCE FOR THE REMAINDER OF 2012
Global supply and demand fundamentals for platinum in 2012 have been stronger than expected.
Despite continued weak platinum demand for industrial and light duty vehicle applications in
Europe, global autocatalyst demand has been firm. Depressed PGM prices during 2012 reduced
the flow of recycled metal and increased demand for platinum jewellery. Anglo American Platinum
believes that stronger than expected demand and reduced supply from South Africa should result
in a balanced to deficit market in 2012.
In July 2012, we guided the market that we would be targeting refined production levels of between
2.4 and 2.5 million ounces of platinum for 2012, dependent on market conditions. As a result of the
illegal industrial action, our refined production target for 2012 has been reduced to between 2.2
and 2.4 million platinum ounces. We will continue to monitor the impact of the illegal industrial
action closely with a view of reacting to further strike related production disruptions.
The unit cash operating cost guidance for 2012 of up to R15,000 per equivalent refined platinum
ounce was based on production levels of between 2.4 and 2.5 million platinum ounces. Given the
production disruptions resulting from the ongoing illegal industrial action at our Rustenburg, Union
and Amandelbult mining operations and the high fixed cost nature of the business, we revise our
unit cost target for 2012 to between R15,500 and R16,000 per equivalent refined platinum ounce.
In July 2012, we announced a R700 million cut in our 2012 capital expenditure target from R8
billion to R7.3 billion due to continued market volatility and uncertainty. This was in addition to a R1
billion cut in capital expenditure announced in February 2012. In light of the current production
disruptions and continued adverse market conditions, we are reducing the full year capital
expenditure target for 2012 by another R800 million to R6.5 billion. We will continue to monitor the
impact of the illegal strike on our capital expenditure plans with a view of making adjustments to
ensure effective capital allocation and appropriate prioritisation of projects.
Any reference to future financial performance, included in this announcement, has not been
reviewed or reported on by the Company’s auditors.
ANGLO AMERICAN PLATINUM
THIRD QUARTER PRODUCTION REPORT
PERIOD 01 JULY 2012 TO 30 SEPTEMBER 2012
Unaudited Unaudited Unaudited Unaudited
Qurter ended Qurter ended Nine months Nine months
30 Sept 2012 30 Sept 2011 30 Sept 2012 30 Sept 2011
Attributable equivalent refined Pt
production (see note 1) 000 oz 626 667 1 803 1 827
Own Mines and WLTR 000 oz 426 447 1 228 1 210
Joint ventures - mined 000 oz 60 66 176 184
Joint ventures and associates - purchased 000 oz 124 132 356 368
Third parties - purchased 000 oz 17 22 44 65
Gross refined production
Platinum 000 oz 649 647 1 675 1 820
Palladium 000 oz 392 376 983 1 038
Rhodium 000 oz 91 75 220 241
Gold 000 oz 39 17 87 77
PGMs 000 oz 1 287 1 235 3 275 3 535
000
Nickel tonne 3.7 4.9 13.8 15.2
000
Copper tonne 2.7 3.1 8.9 9.9
Pt
from: Mining 000 oz 488 490 1 261 1 383
Purchase of concentrate 000 oz 150 156 371 437
Toll refining (see note
2) 000 oz 11 - 42 -
Pt Pipeline stock adjustment 000 oz - - 138 36
Pipeline
movement 000 oz -12 20 308 42
Rustenburg Operations excl WLTR
000
Tonnes Milled tonne 2 329 2 355 7 254 6 473
Grade (4E) g/t 3.87 3.81 3.69 3.70
Merensky milled % 34 34 33 33
Equivalent refined production 000 oz 148 149 436 394
Union Operations
000
Tonnes Milled tonne 1 289 1 218 3 432 3 740
Grade (4E) g/t 3.15 3.88 3.40 3.41
Merensky milled % 1 4 2 4
Equivalent refined production 000 oz 57 75 174 201
Amandelbult Operations
000
Tonnes Milled tonne 1 650 1 720 4 508 4 608
Grade (4E) g/t 4.86 4.18 4.28 4.19
Merensky milled % 19 24 20 23
Equivalent refined production 000 oz 123 116 303 317
Mogalakwena Mine
000
Tonnes Milled tonne 2 510 2 690 7 955 8 255
Grade (4E) g/t 2.82 2.96 2.80 2.93
Equivalent refined production 000 oz 69 82 229 229
Unki Platinum
Mine
000
Tonnes Milled tonne 387 306 1 157 841
Grade (4E) g/t 3.35 3.80 3.44 3.57
Equivalent refined production 000 oz 15 13 48 35
Joint Venture Operations - mined (excl
POC)
000
Tonnes Milled tonne 1 113 1 293 3 335 3 606
Grade (4E) g/t 3.67 3.77 3.72 3.72
Merensky milled % - - 1 -
Equivalent refined production 000 oz 60 66 176 184
Prices achieved
Platinum $/oz 1 466 1 765 1 513 1 776
Palladium $/oz 606 764 637 771
Rhodium $/oz 1 154 1 912 1 304 2 148
Nickel $/tonne 15 554 22 241 17 159 24 548
Average exchange rate R/$ 8.26 7.14 8.06 6.98
Cash operating cost / equivalent refined Pt
oz R 15 377 13 269 14 976 13 093
Notes:
1. Mine's production converted to equivalnet refined production using Amplats' standard smelting and refining
recoveries
2. Toll refining represents metal refined in respect of the recycling project and it was returned to the third party
3. Grades and production are reflected inclusive of low grade surface material at operations
Johannesburg, South Africa
25 October 2012
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
For further information, please contact:
Investors: Media:
Kgapu Mphahlele Mary Jane Morifi
+27 (0) 11 373 6239 +27 (0) 11 373 6638
kgapu.mphahlele@angloamerican.com mary-jane.morifi@angloamerican.com
Mpumi Sithole
+27 (0) 11 373 6246
mpumi.sithole@angloamerican.com
Notes to editors:
Anglo American Platinum Limited is a member of the Anglo American plc Group and is the world’s
leading primary producer of platinum group metals. The company is listed on the Johannesburg
Securities Exchange (JSE). Its mining, smelting and refining operations are based in South Africa.
Elsewhere in the world, the Group owns Unki Platinum Mine in Zimbabwe and is actively exploring
in Brazil. Amplats has a number of joint ventures with several historically disadvantaged South
African consortia as part of its commitment to the transformation of the mining industry. Amplats is
committed to the highest standards of safety and continues to make meaningful and sustainable
difference in the development of the communities around its operations.
www.angloamericanplatinum.com
Anglo American is one of the world’s largest mining companies, is headquartered in the UK and
listed on the London and Johannesburg stock exchanges. Anglo American’s portfolio of mining
businesses spans bulk commodities – iron ore and manganese, metallurgical coal and thermal
coal; base metals – copper and nickel; and precious metals and minerals – in which it is a global
leader in both platinum and diamonds. Anglo American is committed to the highest standards of
safety and responsibility across all its businesses and geographies and to making a sustainable
difference in the development of the communities around its operations. The company’s mining
operations, extensive pipeline of growth projects and exploration activities span Southern Africa,
South America, Australia, North America, Asia and Europe. www.angloamerican.com
Date: 25/10/2012 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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