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Summarised Preliminary Audited Group Financial Results for the year ended 31 December 2013
ANGLO AMERICAN PLATINUM LIMITED
Incorporated in the Republic of South Africa
Registration number: 1946/022452/06
Share code: AMS
ISIN: ZAE000013181
(Amplats, the Company, the Group or Anglo American Platinum)
SUMMARISED PRELIMINARY AUDITED GROUP FINANCIAL RESULTS
for the year ended 31 December 2013
Anglo American Platinum Limited's consolidated preliminary audited financial results for the year ended 31 December
2013 have been independently reviewed by the Group's external auditors. The preparation of the Group's audited
results for the year ended 31 December 2013 was supervised by the Finance Director, Mr B Nqwababa.
SUMMARISED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2013
Audited Audited
2013 2012
Notes Rm Rm
Gross sales revenue 52,822 43,148
Commissions paid (418) (310)
Net sales revenue 2 52,404 42,838
Cost of sales 3 (46,208) (41,948)
Gross profit on metal sales 3 6,196 890
Other net expenditure (964) (198)
Loss on scrapping of property, plant and equipment (2,814) (6,606)
Market development and promotional expenditure (450) (420)
Operating profit/(loss) 1,968 (6,334)
Loss on acquisition of properties from Atlatsa Resources Corporation (Atlatsa) 6 (833) -
Net gain on Atlatsa refinancing transaction 6 454 -
Loss on revaluation of investment in Wesizwe Platinum Limited (Wesizwe) (40) (358)
Impairment of associates - (105)
Interest expensed (675) (435)
Interest received 57 220
Remeasurements of loans and receivables 44 54
Losses from associates (net of taxation) (298) (659)
Profit/(loss) before taxation 677 (7,617)
Taxation 4 (2,191) 897
Loss for the year (1,514) (6,720)
Other comprehensive income, net of income tax
Items that will be reclassified subsequently to profit or loss 950 325
Deferred foreign exchange translation gains on Unki Platinum Mine 833 95
Share of other comprehensive income of associates 8 -
Reclassification of unrealised losses on available-for-sale investments to loss 40 178
for the year
Net gains on available-for-sale investments 69 52
Total comprehensive loss for the year (564) (6,395)
Loss attributable to:
Owners of the Company (1,370) (6,677)
Non-controlling interests (144) (43)
(1,514) (6,720)
Total comprehensive loss attributable to:
Owners of the Company (420) (6,352)
Non-controlling interests (144) (43)
(564) (6,395)
RECONCILIATION BETWEEN LOSS AND HEADLINE EARNINGS/(LOSS)
Loss attributable to shareholders (1,370) (6,677)
Adjustments
Net (profit)/loss on disposal of property, plant and equipment (4) 6
Tax effect thereon 1 (2)
Loss on scrapping of property, plant and equipment 2,814 6,606
Tax effect thereon (788) (1,850)
Loss on acquisition of properties from Atlatsa 833 -
Tax effect thereon - -
Loss on revaluation of investment in Wesizwe 40 358
Tax effect thereon - -
Impairment of associates - 105
Profit on sale of other mineral rights and investments (75) (14)
Headline earnings/(loss) 1,451 (1,468)
Number of ordinary shares in issue (millions)* 267.3 267.3
Weighted average number of ordinary shares in issue (millions) 261.0 261.0
Loss per ordinary share (cents)
- Basic (525) (2,558)
- Diluted (522) (2,547)
Attributable headline earnings/(losses) per ordinary share (cents)
- Headline 556 (562)
- Diluted 553 (560)
* Includes the shares issued as part of the community empowerment transaction, but excludes the shares held by the
Group ESOP and the shares held in terms of the Group's various share schemes.
SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2013
Audited Audited
2013 2012
Notes Rm Rm
ASSETS
Non-current assets 64,132 64,652
Property, plant and equipment 43,298 43,946
Capital work-in-progress 9,810 9,149
Investment in associates 6,816 6,653
Investments held by environmental trusts 732 642
Other financial assets 3,422 4,204
Other non-current assets 54 58
Current assets 24,895 21,295
Inventories 19,668 15,937
Trade and other receivables 3,624 2,708
Other assets 441 472
Other current financial assets - 4
Cash and cash equivalents 1,162 2,174
Total assets 89,027 85,947
EQUITY AND LIABILITIES
Share capital and reserves
Share capital 27 27
Share premium 21,439 20,956
Foreign currency translation reserve 1,007 174
Available-for-sale reserve 47 (62)
Retained earnings 27,362 28,725
Non-controlling interests 126 280
Shareholders' equity 50,008 50,100
Non-current liabilities 21,968 20,668
Non-current interest-bearing borrowings 5 9,486 8,104
Environmental obligations 1,859 1,709
Employees' service benefit obligations 3 24
Deferred taxation 10,620 10,831
Current liabilities 17,051 15,179
Current interest-bearing borrowings 5 3,132 4,561
Trade and other payables 7,858 6,425
Other liabilities 2,157 1,983
Other current financial liabilities 43 131
Share-based payments provision 40 54
Taxation 3,821 2,025
Total equity and liabilities 89,027 85,947
SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2013
Audited Audited
2013 2012
Rm Rm
Cash flows from operating activities
Cash receipts from customers 51,838 43,109
Cash paid to suppliers and employees (44,559) (40,417)
Cash generated from operations 7,279 2,692
Interest paid (net of interest capitalised) (522) (201)
Taxation paid (679) (602)
Net cash from operating activities 6,078 1,889
Cash flows used in investing activities
Purchase of property, plant and equipment (includes interest capitalised) (6,346) (7,201)
Proceeds from sale of plant and equipment 69 102
Proceeds on sale of mineral rights and other investments 43 14
Distribution from associates - 94
Loans to associates (367) (535)
Advances made to Plateau Resources Proprietary Limited (Plateau) (421) (305)
Settlement of obligation to subscribe for 'S' preference shares in Newshelf - (86)
1061 Proprietary Limited
(Decrease)/increase in investments held by environmental trusts (36) 78
Interest received 42 36
Growth in environmental trusts 3 3
Other advances - (91)
Net cash used in investing activities (7,013) (7,891)
Cash flows (used in)/from financing activities
Share issue expenses on the community economic empowerment - (5)
transaction
Proceeds on partial disposal of interest in Masa Chrome Company 247 -
Proprietary Limited (Masa)
Purchase of treasury shares for the Bonus Share Plan (BSP) (239) (231)
(Repayment of)/proceeds from interest-bearing borrowings (50) 6,706
Cash dividends paid - (532)
Cash distributions to minorities (35) (58)
Net cash (used in)/from financing activities (77) 5,880
Net decrease in cash and cash equivalents (1,012) (122)
Cash and cash equivalents at beginning of year 2,174 2,296
Cash and cash equivalents at end of year 1,162 2,174
Movement in net debt
Net debt at beginning of year (10,491) (3,662)
Net cash from operating activities 6,078 1,889
Net cash used in investing activities (7,013) (7,891)
Other (30) (827)
Net debt at end of year (11,456) (10,491)
Made up as follows:
Cash and cash equivalents 1,162 2,174
Non-current interest-bearing borrowings (9,486) (8,104)
Current interest-bearing borrowings (3,132) (4,561)
(11,456) (10,491)
SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2013
Foreign
currency Available- Non-
Share Share translation for-sale Retained controlling
capital premium reserve reserve earnings interests Total
Rm Rm Rm Rm Rm Rm Rm
Balance at 31 December 2011 (audited) 27 21,014 79 (292) 35,534 381 56,743
Total comprehensive loss for the year 95 230 (6,677) (43) (6,395)
Deferred taxation charged directly to equity 5 5
Cash distributions to minorities (58) (58)
Cash dividends paid (532) (532)
Share issue expenses on community (5) (5)
economic empowerment transaction
Shares acquired in terms of the BSP -
treated
as treasury shares (-)* (231) (231)
Shares vested in terms of the BSP -* 178 (178) -
Equity-settled share-based compensation 589 589
Shares purchased for employees (16) (16)
Balance at 31 December 2012 (audited) 27 20,956 174 (62) 28,725 280 50,100
Total comprehensive loss for the year 833 109 (1,362) (144) (564)
Deferred taxation charged directly to equity (6) (6)
Cash distributions to minorities (35) (35)
Gain on disposal of partial interest in a 222 25 247
subsidiary
Shares acquired in terms of the BSP - (-)* (239) (239)
treated as treasury shares
Shares vested in terms of the BSP -* 271 (271) -
Shares vested in terms of the Group -* 451 (451) -
Employee Share Option Scheme (Kotula)
Equity-settled share-based compensation 510 510
Shares purchased for employees (5) (5)
Balance at 31 December 2013 (audited) 27 21,439 1,007 47 27,362 126 50,008
*Less than R500?000.
SUMMARISED NOTES TO THE CONSOLIDATED PRELIMINARY FINANCIAL STATEMENTS
for the year ended 31 December 2013
1. The preliminary summarised financial information is in accordance with the framework concepts and the
measurement and recognition requirements of International Financial Reporting Standards (IFRS), the SAICA
Financial Reporting Guides as issued by the Accounting Practices Committee, Financial Reporting Pronouncements
as issued by the Financial Reporting Standards Council, as well as 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 31 December 2012, except for the adoption of IFRIC 20 - Stripping Costs in
the Production Phase of Surface Mine and various other amendments to accounting standards in the year ended 31
December 2013. These changes did not have a material impact on the financial results of the Group.
Net sales revenue Operating contribution Depreciation
Audited Audited Audited
2013 2012 2013 2012 2013 2012
Rm Rm Rm Rm Rm Rm
2. SEGMENTAL INFORMATION
Segment revenue and results
Operations
Bathopele Mine 2,279 2,059 339 (32) 301 318
Khomanani Mine 1,384 1,824 74 (167) 151 213
Thembelani Mine 1,833 1,556 (122) (318) 226 227
Khuseleka Mine 2,958 2,388 297 (228) 324 271
Siphumelele Mine 1,706 1,461 152 (56) 172 182
Tumela Mine 4,335 3,731 677 218 412 437
Dishaba Mine 2,855 2,518 466 351 258 274
Union Mine 3,442 3,575 49 (205) 392 423
Mogalakwena Mine 10,086 7,649 3,668 2,201 1,423 1,462
Twickenham Platinum Mine 148 1 (403) 1 76 -
Unki Platinum Mine 1,639 1,345 315 176 253 236
Modikwa Platinum Mine 1,620 1,185 266 141 163 152
Mototolo Platinum Mine 1,362 1,006 495 274 102 111
Kroondal Platinum Mine 2,608 1,717 545 221 191 61
Marikana Platinum Mine - 291 - (110) - 1
38,255 32,306 6,818 2,467 4,444 4,381
Western Limb Tailings 1,163 768 597 265 90 110
Retreatment (WLTR)
Chrome refining 503 464 429 370 15 10
Total – mined 39,921 33,538 7,844 3,102 4,549 4,501
Purchased metals 12,483 9,300 1,596 525 225 246
52,404 42,838 9,440 3,627 4,774 4,747
Other costs (3,244) (2,737)
Gross profit on metal sales 6,196 890
Audited Audited
2013 2012
Rm Rm
3. GROSS PROFIT ON METAL SALES
Gross sales revenue 52,822 43,148
Commissions paid (418) (310)
Net sales revenue 52,404 42,838
Cost of sales (46,208) (41,948)
On-mine (30,201) (27,607)
Cash operating costs (26,666) (24,167)
Depreciation (3,535) (3,314)
Deferred waste stripping - (126)
Purchase of metals and leasing activities* (10,582) (8,959)
Smelting (2,968) (3,096)
Cash operating costs (2,385) (2,310)
Depreciation (583) (786)
Treatment and refining (2,578) (2,693)
Cash operating costs (1,922) (2,046)
Depreciation (656) (647)
Increase in metal inventories 3,365 3,144
Other costs (3,244) (2,737)
Gross profit on metal sales 6,196 890
*Consists of purchased metals in concentrate, secondary metals and other metals.
4. 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:
Audited Audited
2013 2012
% %
South African normal taxation 28.0 (28.0)
STC - 0.7
28.0 (27.3)
Disallowable items 10.0 3.0
Capital profits 35.0 -
Prior year underprovision 260.0 9.9
Effect of after-tax shared loss from associates 12.0 2.4
Difference in tax rates of subsidiaries (21.0) 0.4
Other (0.4) (0.2)
Effective taxation rate 323.6 (11.8)
2013 2013 2012 2012
Audited Audited
Rm Rm Rm Rm
Facility Utilised Facility Utilised
amount amount amount amount
5. INTEREST-BEARING BORROWINGS
Unsecured financial liabilities measured at amortised cost
*Committed: 22,384 10,028 20,181 8,165
1Uncommitted: 9,555 2,590 6,331 4,500
31,939 12,618 26,512 12,665
Disclosed as follows:
Current interest-bearing borrowings 3,132 4,561
Non-current interest-bearing borrowings 9,486 8,104
12,618 12,665
Borrowing powers
The borrowing powers in terms of the articles of association of the holding company and its subsidiaries are
unlimited. The weighted average borrowing rate at 31 December 2013 was 6.27% (2012: 6.12%).
*Committed facilities are defined as the bank's obligation to provide funding until maturity of the facility by
which time the renewal of the facility is negotiated. R18,070 million (2012: R15,595 million) of the facilities is
committed for one to five years, R2,300 million (2012: R3,050 million) is committed for a rolling period of 364
days, while the rest is committed for less than 364 days. The Company has adequate committed facilities to
meet its future funding requirements.
1Uncommitted facilities are callable on demand.
6. REFINANCING OF ATLATSA
In 2012, the Group and Atlatsa agreed to restructure, recapitalise and refinance Atlatsa and Bokoni Platinum
Holdings Proprietary Limited (Bokoni Holdco). The conditions for these transactions were met in December 2013. The
first phase of the transactions pertaining to the acquisition of certain properties from Bokoni Holdco, were implemented
in December 2013. To the extent that the refinancing was completed in 2013, the Group accounted for a loss on the
acquisition of these properties of R833 million as well as a net gain of R454 million arising on the extinguishment of
the previous facilities and the fair valuation of the new senior and working capital facilities. The conversion of the B
preference shares to 115.8 million common shares in Atlatsa and the subsequent disposal of these shares on loan
account, together with the subscription by the Group for 125 million Atlatsa common shares were completed on
31 January 2014.
7. UNKI PLATINUM MINES INDIGENISATION PLAN
The Company signed a heads of agreement in November 2012 with the Zimbabwean government, that set out
the keys steps in implementing the approved indigenisation plan for Unki Platinum Mine. Little progress has been
made in implementing this plan as at year end and engagement with the Zimbabwean government continues.
The Zimbabwean government recently announced plans to encourage the local beneficiation of platinum group
metals in the country. The current Unki mine has not reached sufficient scale to justify the construction of smelting and
refining facilities. Unki will however seek to locally beneficiate its production in country should such facilities be
available and it will also explore ways to partner with other established producers who have such facilities in country.
Unki will also continue its engagement strategy with the Zimbabwean government in seeking to reach mutual
beneficial outcome regarding local beneficiation.
8. POST-BALANCE SHEET EVENT
Subsequent to 31 December 2013, the Group completed the second and final phase of the Atlatsa refinancing
plan where through a series of transactions, the Group converted its unlisted preference share instrument in an SPV
for 115.8 million common shares in Atlatsa. These shares were then sold to Pelawan Trust on loan account for
R463.2 million. The loan is secured and interest-bearing.
In the final phase of the refinancing plan, the Group subscribed for 125 million new Atlatsa common shares for
an aggregate subscription price of R750 million. These proceeds were utilised by Atlatsa to reduce the senior loan
provided by Rustenburg Platinum Mines to Plateau. These transactions were completed on 31 January 2014.
The accounting impact of the final phase of these transactions is a net gain of R243 million which will be
reflected in profit/loss for the period in 2014.
9. AUDITOR'S REVIEW
The annual report from which the summarised preliminary annual results have been extracted has been audited
by the Company's auditors, Deloitte & Touche and is consistent in all material respects with the Group financial
statements. The audit of the summarised preliminary annual results was performed in accordance with ISA 810,
'Engagement to Report on Summary Financial Statements'. The auditors review does not necessarily report on all the
information contained in this announcement. Shareholders are therefore advised that, in order to obtain a full
understanding of the nature of the auditors' engagement, they should obtain a copy of the auditors review report
together with the accompanying summarised preliminary financial information from the Company's registered office.
Their unmodified report on the group annual financial statements and the summarised preliminary annual results is
available for inspection at the Company's registered office, together with the financial statements identified in the
respective auditor's reports. Any reference to future financial performance, included in this announcement, has not
been reviewed or reported on by the Company's auditors.
GROUP PERFORMANCE DATA (unaudited)
for the year ended 31 December 2013
SALIENT FEATURES
2013 2012
Average market prices achieved
Platinum US$/oz 1,485 1,532
Palladium US$/oz 722 640
Rhodium US$/oz 1,053 1,264
Gold US$/oz 1,384 1,669
Nickel US$/lb 6.58 7.76
Copper US$/lb 3.22 3.58
US$ basket price - Pt
(net sales revenue per Pt oz sold) US$/oz Pt sold 2,326 2,406
US$ basket price - PGM
(net sales revenue per PGM oz sold) US$/oz PGM sold 1,123 1,316
R basket price - Pt
(net sales revenue per Pt oz sold) R/oz Pt sold 22,586 19,764
R basket price - PGM
(net sales revenue per PGM oz sold) R/oz PGM sold 10,906 10,811
Exchange rates
Average exchange rate achieved on sales ZAR/US$ 9.7144 8.2156
Exchange rate at end of year ZAR/US$ 10.5079 8.4689
Unit cost performance
Cash on-mine cost/tonne milled R 675 625
Cash operating cost per refined Pt ounce1 R 17,036 15,660
Cost of sales per total Pt ounce sold2 R 19,916 19,354
Productivity
m2 per total operating employee per 6.57 6.05
month3
Refined platinum ounces per employee4 30.0 29.3
1Cash operating cost per equivalent refined platinum ounce excludes ounces from purchased concentrate and associated
costs.
2Total platinum ounces sold: refined platinum ounces sold plus platinum ounces sold in concentrate.
3Square metres mined per operating employee including processing, but excluding projects, opencast and Western Limb
Tailings Retreatment employees.
4Refined platinum ounces per employee: mined refined platinum ounces divided by own and attributable Anglo American
Platinum Limited (Amplats) joint-venture operational employees.
TOTAL REFINED PRODUCTION
2013 2012
Platinum 000 oz 2,379.5 2,378.6
Palladium 000 oz 1,380.8 1,395.9
Rhodium 000 oz 294.7 310.7
Gold 000 oz 100.0 105.2
PGMs 000 oz 4,564.9 4,640.6
Nickel - Refined 000 tonnes 16.8 17.7
Nickel - Matte 000 tonnes 5.8 –
Copper - Refined 000 tonnes 8.3 11.4
Copper - Matte 000 tonnes 5.8 –
Chrome 000 tonnes 399.5 352.4
RESULTS COMMENTARY 2014
- Record year for safety performance
- Delivered on restructuring
- Return to profitability
- Production and sales in line with strategy at 2.3 million ounces
- Solid and improved JV performance
- 52.4 4E million ounce increase in Mogalakwena ore reserves
- Unit costs contained - up 4% year-on-year
Results Commentary
SAFETY
Tragically, we had six work-related fatalities in 2013. Our sincere condolences go to the families, friends and
colleagues of Mr Matlapeng Lekoba, Mr Mashabela Phuku, Mr Tsembele Mashele, Mr Eddie Moremi, Mr Zumanyaka
Dingani and Mr Absalum Raphapule who lost their lives in 2013.
Despite these tragic losses, Anglo American Platinum has continued to show an improvement in safety performance.
2013 was its best ever safety performance, with the lowest number of fatalities and lowest injury frequency rates
recorded. The Group halved the number of fatalities from 25 in 2007 to 12 in 2011 and has halved this again to 6 in
2013, despite a challenging year with significant changes faced by the Company.
Our safety statistics show a significant improvement, both in frequency rates and absolute numbers. We believe that in
order to achieve zero harm we should report and focus on all injuries, including: Medical Treatment Cases (MTC), First
Aid Cases (FAC), Bumps and Scrapes and Lost Time Injuries (LTI). We believe that this approach aligns us better to
achieve our goal of zero harm. We will also be placing a greater emphasis this year on leading indicators to proactively
manage our safety performance.
Several operations achieved their best performance ever in 2013. The company had operated for more than 100 days,
fatality-free, on 13 June 2013 - only the second time in the history of the company that we have achieved this
milestone. We are optimistic that we will continue to improve on our safety performance.
We believe that our consistent application and focus on our safety strategy has helped us to achieve this improvement
in our safety performance. Our strategy follows a holistic approach, with four focus areas - management systems,
people and behaviour, engineered solutions and wellness in the workplace.
PORTFOLIO REVIEW
The main focus in the year under review was the completion of the Portfolio Review and the beginning of the
execution of its outcomes. One of the most important consequences of the Portfolio Review was that, at the end of
August, we integrated Rustenburg's five mines into three, consolidated Union's two mines into one and established a
new operating model and associated organisational design for the company.
In conjunction, a number of cost saving initiatives were implemented and the process of reducing support service
overheads was completed. As a result, the number of staff based at the Johannesburg head office halved and further
optimisation at our operations was achieved through the consolidation of support services structures of our mining and
processing operations into regional centres.
As a result of the structural changes, a reduction in the number of operational employees was necessary and the
ultimate outcome resulted in no forced retrenchments. The initial announcement was that 14,000 jobs would be
affected, but this was reduced to 9,800 after the decision was made to continue operating Khuseleka 1 shaft. After
finalisation of the consultation with organised labour, the reduction in employees and contractor positions was
expected to be 7,500 by the end of 2013, and during 2014, a further 1,700 would be reduced after the reclamation
activities at the closed mines had been completed. The total labour positions actually reduced in 2013 amounted to
7,438. Of the employees impacted, 2,346 were redeployed to roles created by natural attrition throughout the
organisation and intentionally left vacant through the restructuring consultation process. An additional 3,493
employees accepted voluntary severance packages and early retirement, and 1,599 contractor positions were
removed, eliminating vacant roles and through other retrenchment avoidance mechanisms.
There have also been a number of other new initiatives to further embed change. In addition, we have placed a much
greater focus on the technical aspects of our business, and we have now made appointments to two new executive
positions - heading up Technical, as well as Safety, Health and Environment.
MPRDA AMENDMENTS AND OTHER LEGAL MATTERS
Along with other mining companies, we have actively participated in discussions with our regulator and the
Parliamentary Portfolio Committee on certain aspects of the proposed amendments to the Mineral and Petroleum
Resource Development Act (MPRDA). We have collectively expressed our concerns through the Chamber of Mines
and the majority of these have been resolved through the engagement process. One challenging area has been
the proposed amendments to section 26, regarding beneficiation and strategic minerals, where the December 2013
draft provided the Minister of Mineral Resources with discretionary powers to declare minerals as strategic
and to determine local pricing conditions. The subsequent discussions between the Chamber and the Department
of Mineral Resources (DMR) have helped the parties to move closer together in issues such as security of supply
to the domestic and international market places and the need for market pricing. Discussions between the Chamber
of Mines and the DMR are on-going and we believe that greater certainty in the regulatory framework is emerging.
LABOUR RELATIONS
A new recognition agreement was signed with the Association of Mineworkers and Construction Union (AMCU) on
25 February 2013 and the National Union of Mineworkers (NUM) was derecognised as the Company's majority union
in July 2013.
The Company implemented a major restructuring in 2013, creating a difficult environment for many Anglo American
Platinum employees and resulting in a challenging year for labour relations.
The Section 189 regulatory retrenchment process commenced in June and was concluded in early August. The NUM
declared a non-procedural dispute through the Labour Court, which was over-ruled when the judge ruled that the
company had followed all required legal processes. AMCU was awarded a certificate of non-resolution by the
Commission for Conciliation, Mediation and Arbitration (CCMA), which allowed AMCU members to proceed with a
legal strike that ended in October 2013. The strike led to a loss of platinum production of 44,000 ounces.
Wage negotiations have been protracted. By the end of the year agreement had been reached with NUM and
United Association of South Africa (UASA), but not with AMCU, and National Union of Metalworkers of South Africa
(NUMSA). Having failed to reach agreement with AMCU, the company received notification from AMCU of the union's
intention to embark on a legal strike in January 2014. The company and AMCU have been engaged in negotiations
since last year but, despite attempts to reach a sustainable agreement on wages and certain conditions of employment,
have not been able to reach a solution acceptable to both parties. The Company, along with Lonmin and Impala,
is participating in a CCMA mediated wage negotiation process, facilitated by the Departments of Mineral Resources
and Labour respectively, in an attempt to reach agreement on wages in the platinum sector. At the time of publication,
AMCU was on a strike and the CCMA was facilitating negotiations between AMCU and the major platinum companies.
FINANCIAL REVIEW
Headline earnings increased to R1.5 billion compared to the loss of R1.5 billion in 2012. The Group incurred a loss of
R1.4 billion attributable to ordinary shareholders. This result was primarily due to a number of once-off items, including
the write down of the carrying value of assets from mines which were placed on care and maintenance as part of the
integration of the Rustenburg complex from five mines into three. In addition, restructuring costs and writedowns amounting to
R4.3 billion, and a higher effective tax rate resulting from certain previously unresolved historical tax matters was
incurred. These were offset by an improvement in operational and financial performance by the company. The
attributable loss for the year was R5.25 per share and headline earnings was R5.56 per share.
Net sales revenue of R52.4 billion was 22% higher than the R42.8 billion in 2012, due primarily to higher sales
volumes and the impact of the weakening of the rand/US dollar exchange rate. Refined platinum sales for the year
increased to 2.32 million ounces, a 7% increase. In line with the company's strategy, sales volumes of 2.3 million
ounces reflected the reduced production level from the restructured mining portfolio.
The average US dollar basket price per platinum ounce sold declined further in 2013 to $2,326, lower than the
US$2,406 and US$2,698 achieved in 2012 and 2011 respectively. The average US dollar sales price achieved on
platinum declined by 3% to US$1,485 per ounce, as the platinum price continues to exhibit price responses that are
disconnected from the fundamental supply/demand balances, with overall depressed global sentiment towards
commodities and supply from above ground stocks weighing on the platinum price. The decline in metal prices was
more than offset by a sharp weakening of the average rand / US dollar exchange rate to R9.71:US$1.00 from the
R8.22 average during 2012. After taking into account the effect of the weakening of the rand against the US dollar, the
average rand basket price per platinum ounce was stronger (showing a 14% increase) at R22,586.
As in the rest of the industry, Anglo American Platinum experienced mining inflation of approximately 9%, due to
above headline inflation (CPI) increases in the price of electricity, diesel and labour. The cash costs of the company
are composed principally of labour (41%); stores (27%); electricity, water and other utilities (12%); contractors (6%)
and other costs (14%).
Cost of sales increased by 10%, from R41.9 billion to R46.2 billion and on-mine operating expenses increased by
R2.6 billion or 9.4%. The company incurred R10.6 billion on the purchase of metals, which was an increase of 18.1%
due to a year-on-year increase in production volumes and rand metal prices. The cost of processing (smelting,
treatment and refining), of R5.5 billion, decreased by 4.2%, following various cost savings initiatives such as the
reduction of processing material consumption and general energy management, and a reduction in depreciation of
processing. Cost of sales benefited from the R3.1 billion movement of inventory during the year.
Notwithstanding the 9% mining inflation experienced, the cash operating cost per equivalent refined platinum ounce
increased by 4% from R16,364 to R17,053, owing to the offsetting effects of the increase in production and the benefit
realised through various cost savings initiatives.
Gross profit on metal sales increased by R5.3 billion to R6.2 billion from R890 million in 2012. With net sales revenue
growing by 22.3%, and cost of sales increasing by 10.2%, this resulted in our gross profit margin improving to 11.8%
in 2013. After taking into account the scrapping of R2.8 billion of projects and other assets, and restructuring costs of
R1.5 billion, the company generated an operating profit of R2.0 billion, returning to profitability from the loss incurred in
2012, of R6.3 billion.
In summary, the largest contributors to the operating profit for the year were:
A 7% increase in platinum sales volumes and increases in the volumes of "minor metals" sold, which had a R3.3 billion
positive impact on revenue.
The average rand / US dollar exchange rate of R9.71:US$1.00 was weaker than the R8.22 during 2012, and resulted
in a positive contribution of some R6.8 billion.
These factors were partially offset by:
A weighted average decline of 3% in the US dollar basket-price prices, totalling R1.4 billion.
A R2.8 billion increase in the cost of sales due to cost escalations above inflation, partially offset by the positive
contribution of various business improvement initiatives.
Headline earnings increased to R1.5 billion from the loss of R1.5 billion incurred in 2012. The company recorded
headline earnings per share attributable to ordinary shareholders of R5.56, compared to the loss of R5.62 in 2012.
The weighted average number of ordinary shares in issue during 2013 was unchanged at 261.0 million. The most
significant items excluded from headline earnings (before tax) are the scrapping of projects and other assets of R2.8
billion, and impairment of properties to the value of R833 million as part of the refinancing of Atlatsa Resources
Corporation (Atlatsa) transactions.
As part of the restructuring, the company has set targets to create R3.8 billion of benefits by 2015. We are well on the
way to achieving this target with R1.9 billion of savings delivered in 2013.
Working capital has increased by R2.9 billion to R12.4 billion as at 31 December 2013, with working capital days
increasing as a result from 82 days to 108 days. The main contributor to the increase in working capital was the
growth in precious metal stock holding to manage business risks, largely labour related, and an increase in the
average stock valuation due to increases in production costs. The increase in trade receivables was due to the
recognition of revenue in respect of the sale of nickel copper matte (NCM) to a third party, the payment for which will
be made once the NCM has been refined by the third party, and certain precious metals contained within the matte are
returned to Anglo American Platinum.
The company generated R7.3 billion in cash from its operations, R4.6 billion more than the R2.7 billion generated in
2012. These cash flows were used to pay taxation of R679 million; fund our capital expenditure of R6.3 billion
(including capitalised interest); contribute towards the funding of our joint venture and associates operations of R788
million; and settle interest to our debt providers of R522 million during 2013.
In the current period, a settlement has been reached between the South African Revenue Service and Rustenburg
Platinum Mines Limited in respect of certain previously unresolved historical tax matters. The total amount payable in
terms of the settlement agreement is R3.4 billion, and has been fully provided for. The settlement agreement does not
allow us to disclose any more information.
Owing to the net debt position of the Group and considering future funding requirements and uncertainty in the global
economic markets, the Board decided not to declare a dividend in 2013. Anglo American Platinum will continue to
monitor its capital requirements and its ability to manage debt levels adequately, and will consider future dividend
payments as the situation allows.
MARKETS
Platinum
Gross global platinum demand increased by 6%, as a 14% increase in industrial demand and a 102% increase in
investment demand more than offset the 5% decline in autocatalyst demand and the 1% decline in jewellery demand
during the year.
Primary platinum supply grew by 1%. The 2% increase in South African sales and the 8% increase in sales from
Zimbabwe exceeded the sales declines of 1% in Russia and 9% in North America. Secondary supplies from recycled
autocatalyst, jewellery and industrial scrap decreased by 1% and gross global platinum supply grew by 0.4%.
The resultant platinum deficit in 2013 of more than 850 koz was satisfied by supply from cumulative above-ground
stocks at market prices during the course of the year.
Palladium
Gross global palladium demand decreased by 4%. The combined demand reductions of 12% in jewellery, 6% in
industrial and 97% in investment, far exceeded the 3% increase in autocatalyst demand.
Primary palladium supply was reduced by 3%, as the 8% reduction in sales from Russia and the rest of world (ROW)
more than offset the increases from South Africa, Zimbabwe and North America.
Secondary supplies from recycled autocatalyst, jewellery and industrial scrap increased by 8%, resulting in flat gross
global palladium supply in 2013.
The resultant palladium deficit in 2013 of 621koz was also satisfied by supply from cumulative above-ground stocks at
market prices during the course of the year.
Rhodium
Gross global rhodium demand increased by 2%. Autocatalyst demand remained flat, while there was a 6% increase in
industrial demand and a 19% increase in investment demand. Primary supply decreased by 3% and secondary supply
increased by 9% - keeping gross supply flat and the resulting market deficit of 1%.
Autocatalyst
Global light-vehicle sales increased by 3.8% to 84.2 million units. Continued gains of 14% in China and 7.2% in North
America offset the declines in India and Russia and the much-reduced decline of 1.6% in Europe.
Gross demand for platinum in autocatalysts declined by 5% in 2013 owing largely to the reduction in vehicle
production in the diesel-dominant Indian and European markets; and, in Europe, to the second consecutive year of a
reduction in the proportion of diesel vehicles sold. Palladium use in autocatalysts increased by 3% in 2013, in line with
global growth in gasoline vehicle production. The 13% increase in palladium purchases for autocatalysts in China
offset weakness in other markets. Gross rhodium use in autocatalysts was flat in 2013 as the 13% increase in China to
meet higher gasoline-vehicle production offset weakness in other markets.
Jewellery
The Chinese platinum jewellery market accounted for 67% of gross global jewellery demand in 2013. Platinum
jewellery sales in China continued to benefit from the narrow price premium to gold and increased store traffic from
higher gold purchases as the gold price reduced. Gross demand in China was reduced by 5% from a particularly
strong year in 2012. However, the weak platinum price also reduced the volume of jewellery recycled, resulting in flat
net demand. The much smaller markets of Europe, North America and India all grew and – with recycled volumes in
Japan also being lower - resulted in a net increase of 5% in the demand for platinum jewellery.
Industrial
Platinum in industrial applications increased by 14% as a consequence of capacity increases in the production of
polymer intermediaries and of increases in glass fibre inventory which occurred in support of growth in electrical and
glass applications.
Industrial use of palladium declined by 146 koz as its further substitution by base metals in electronic capacitors and
by ceramics in dentistry exceeded its increased use in polyester manufacture.
The use of rhodium in industrial applications increased by 6% owing to inventory changes in glass manufacture and
capacity increases in the manufacture of oxo-alcohol and acetic acid.
Investment
Investment demand for platinum more than doubled during the year. The South African rand-denominated platinum
exchange-traded fund (ETF), launched in April 2013, grew to over 890 koz by the end of December - far exceeding
expectations of the new equity's attractiveness to investors.
Palladium investment demand declined by nearly 100% in 2013 as a result of ETF disinvestment.
In 2014, we expect a balanced platinum market with capital constrained mining supply and supply from recycled
material matching demand from new autocatalysts [with higher PGM loadings], industrial applications and jewellery.
Any measured investment demand, including ETF's bars and coins, would be expected to drive a deficit.
OPERATIONS
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 year ended 31 December 2013 was
2.32 million ounces, an increase of 5% from 2.22 million ounces in 2012. In line with strategy, targeted production of
2.3 million ounces was achieved, aligning production with market demand and curtailing unprofitable production.
As part of the Portfolio Review undertaken in 2013, the managed Rustenburg operations have been reshaped during
the year, into three mines from the previous five, with Khomanani Mine and Khuseleka 2 Shaft being placed on long-
term care and maintenance. The last shift worked at these operations was in August 2013. Union North Mine and
Union South Mine were consolidated into Union Mine and the uneconomical Union North Mine decline was
successfully closed during August 2013.
Production at managed mining operations was delivered in-line with strategy, despite being impacted by a series of
headwinds during the year. Intermittent illegal work stoppages occurred at various operations during the first half of
2013. In addition, self-imposed safety and S54 stoppages at various times throughout the year added to the
disruptions. In May, a national bus-driver strike resulted in many employees not being able to get to work while,
starting on 27 September 2013, employees embarked on an illegal strike that lasted 11 working days, in protest
against proposed company retrenchments.
Equivalent refined platinum production from own mines, projects in ramp-up and the Western Limb Tailings
Retreatment plant increased by 45,700 ounces or 3% to 1.50 million ounces. Equivalent refined platinum production
from Rustenburg mines (Bathopele, Siphumelele, Thembelani, plus partial production from Khuseleka and
Khomanani) increased by 12,700 ounces or 3%. Amandelbult mines (Tumela and Dishaba) and Union mine recorded
decreases of 7,000 platinum ounces or (2)% and 17,300 platinum ounces or (9)% respectively. Mogalakwena mine
produced record output in 2013, increasing by 35,600 platinum ounces or 12%, as business improvement
programmes increased throughput and recoveries at the concentrator. Unki also had a record year for production and
increased by 1,100 platinum ounces, or 2%.
Equivalent refined platinum production from joint ventures and associates, inclusive of both mined and purchased
production, increased by 11% at 753,100 ounces from operating mines. Kroondal Platinum Mine achieved noteworthy
productivity improvements following the implementation of a revised hanging wall support regime, while production at
Bokoni Platinum Mine increased by 68% due to mining efficiencies in conjunction with the implementation of the open-
pit in 2013.
Equivalent refined platinum purchased from third parties amounted to 63,600 ounces, a 13% increase.
The company refined 2.38 million ounces of platinum, in line with refined production in 2012 and sold 2.32 million
ounces, an increase of 7%. Given the uncertainty around the duration of the strike action, as a precautionary measure,
we are prioritising our sales in line with contractual commitments and have suspended spot sales.
CAPITAL EXPENDITURE PROJECTS
In an environment of capital austerity and challenging market conditions, careful consideration is taken to determine
how projects are prioritised in line with the Company's strategy to increase scrutiny over capital allocation. As a result,
capital expenditure declined from R7.2 billion in 2012 to R6.3 billion in 2013.
Stay-in-business capital expenditure increased by R566 million to R3.6 billion in 2013, while project capital
expenditure reduced by 50%, from R3.38 billion in 2012 to R1.7 billion in 2013, after the review of the capital funding
requirements of the Company. In line with the company's strategy, expenditure on expansion projects was spent
mostly on the Twickenham mine project, housing at the Unki mine, Bathopele mine phase 4 and 5 expansion,
the slag-cleaning furnace and at the UG2 expansion of Modikwa mine joint venture.
The company capitalised R692 million (2012: R399 million), which was spent on waste stripping at Mogalakwena mine
as part of its strategy to increase production. This necessitated an increase in waste tonnes mined from 47.7 million
tonnes (Mt) to 56.3Mt, of which the cost of mining 25.3Mt was capitalised in 2013 (2012: 18.1Mt).
Interest capitalised during the period decreased from R416 million in 2012 to R390 million in 2013. This was a direct
consequence of a smaller number of projects in execution, which was partially offset by higher interest paid on total
borrowings during the year.
MINERAL RESOURCES AND RESERVES
The combined South African and Zimbabwean Ore Reserves increased from 177.2 (4E) Moz to 212.9 (4E) Moz in the
year. This was the result primarily of the conversion of additional Mineral Resources to Ore Reserves in the
Mogalakwena area, and due to the execution of the Atlatsa refinancing transaction.
Due to new information obtained during 2012 and 2013, the Mogalakwena Mineral Resource classification confidence
increased materially. As a consequence, some of the previously reported Inferred Mineral Resources have now been
upgraded to higher resource classification confidence. These Mineral Resources have now been converted to Ore
Reserves. Together with structural re-interpretation the mine design changed from Cut 14 to Cut 16. The Platreef Ore
Reserves increased by 59% from 89.1 (4E) Moz to 141.6 (4E) Moz.
The combination of basket metal prices and exchange rate used to optimise the Mogalakwena open-pit are based on
long-term forecasts aligned with the fourth quarter of 2013 market consensus estimates. Mining costs are based on
2013 actual costs, escalated in real terms to account for mining inflation and increasing depth. Higher and lower metal
prices (5%) have minimal impact on the size of Mogalakwena Ore Reserve.
As a result of the strategic announcement in 2013 (execution of the Portfolio Review and the resulting restructuring of
the company), significant amounts of Merensky and UG2 Ore Reserves were allocated back from Ore Reserves to
Mineral Resources based on economic assumptions. The major impact is on the Rustenburg mines, specifically
Khuseleka and Khomanani.
As part of the transaction in which Anglo American Platinum refinanced Atlatsa, the Company acquired Atlatsa's
attributable interest in the eastern section of the Ga-Phasha project (contiguous to our Twickenham Mine)
and Boikgantsho project (contiguous to our Mogalakwena Mine) for R1.7 billion, which proceeds were utilised by
Atlatsa to reduce Atlatsa's debt owing to Anglo American Platinum.
Due to new information at Mogalakwena, the Mineral Resource reporting depth increased by 50 metres. This, together
with an improved structural interpretation and the Atlatsa transaction resulted in an increase of the Platreef Mineral
Resources, inclusive of Ore Reserves, from 264.9 (4E) Moz to 283.1 (4E) Moz.
BOARD AND COMMITTEE CHANGES
Five new directors were appointed during the course of 2013. Cynthia Carroll resigned as Chairman and Director of
the Company on 26 April 2013. Valli Moosa, formerly the independent lead Non-Executive Director, succeeded Ms
Carroll as Chairman. Mark Cutifani was also appointed a Director on that date.
Peter Mageza, Nombulelo Moholi and Dhanasagree Naidoo were appointed to the Board on 1 July 2013. Brian
Beamish resigned on 30 September 2013 and Anthony (Tony) O'Neill was appointed on 30 October 2013.
Bongani Khumalo resigned on 31 December 2013 and Wendy Lucas-Bull resigned on 1 January 2014.
On 1 May 2013, Elizna Viljoen was appointed as Company Secretary.
OUTLOOK
Market outlook
We expect the global platinum market to remain balanced in the short term, with increasing deficits over the medium
term as steady demand growth exceeds growth in supply from secondary recycled sources and capital constrained
mining supply. The platinum price remains depressed despite significant reductions in cumulative above-ground
stocks in 2012 and 2013.
We expect gross platinum supply, from mining and all recycled sources, in the short term to be similar to gross
demand from the sum of autocatalyst, industrial and jewellery applications.
Although vehicle sales in Europe remain depressed, the year-on-year decline has reduced and the second half of
2013 saw improvements in a number of European markets. Higher loadings associated with the implementation of
Euro 6 emissions limits for light-duty and heavy-duty vehicles will increase platinum demand materially in 2014 and
2015. However, supply from recycled autocatalyst scrap in Europe is expected to increase by similar amounts over the
same period, resulting in flat net demand. The increase in recycled supply is as predicted and reflects the higher
proportion of diesel cars being scrapped - in turn a reflection of the historic growth profile of diesel-car production in
Europe.
The record high in platinum investment demand from ETFs, bars and coins in 2013 is unlikely to be repeated, and
some disinvestment from the +890,000 ounce holding in the South Africa-based ETF should not be ruled out.
We expect continued deficits in the palladium market in the short and medium term owing to growth in global
production of gasoline vehicles and supply growth limited by platinum supply constraints. Above-ground stocks
of palladium, estimated to be far higher than those of platinum, also declined in 2012 and 2013 due to market deficits.
We expect the rhodium market to remain balanced at depressed price levels.
Operational outlook
The focus of the last financial year was the completion of the Portfolio Review and subsequent implementation of the
restructuring. A number of significant milestones were completed during the year, and the attention for 2014 will be to
continue to execute cost saving initiatives identified as part of the review and to improve productivity.
Following the implementation of the Portfolio Review, we plan to keep our baseline production flat at 2.3-2.4 million
platinum ounces in 2014, with production from the mines closed in 2013 made up by increased production at higher
margin operations, through implementation of various operational improvement plans. We continue to aim to align
output with expected demand, and maintain flexibility to meet potential improvements in demand. The majority union,
AMCU, is on strike at the time of publication and the CCMA is mediating the negotiations between the union and the
three major platinum companies, Anglo American Platinum, Impala and Lonmin.
The commercial activities will continue to be an important area of value creation in 2014. Certain significant supply
agreements have been re-negotiated with a reduction or elimination of commissions and discounts which were
previously payable. Re-negotiation of contracts approaching expiry over the coming years is expected to result in
further value benefit as discounts are eliminated. The development and promotion of markets to increase demand for
platinum and other PGM metals will also be an operational priority during 2014.
Anglo American Platinum is committed to the highest standards of safety and continues to make a meaningful and
sustainable difference in the development of the communities around its operations.
Financial outlook
A significant number of cost savings initiatives were implemented during 2013, which are expected to result in the full
annualised value realised in 2014. This year, we expect further cost and revenue benefits to be achieved through
initiatives such as labour efficiency programs and supply chain initiatives.
Cost inflation will remain a challenge. Whilst some cost has been mitigated by the cost reductions as a result of the
restructuring, real inflationary pressures from wages and electricity remain. As of 11 December 2013, we settled on a
2-year wage agreement with NUM and UASA at an average wage increase of 8.1% for the period. We continue our
negotiations with AMCU and NUMSA, which remain on-going. Anglo American Platinum estimates that cash unit costs
will increase to between R18,000- R19,000 per equivalent refined platinum ounce for 2014.
Anglo American Platinum's project portfolio has been aligned with the proposals of the Portfolio Review, and capital
expenditure guidance is R6.0bn - R7.3bn for 2014, excluding pre-production cost, capitalised waste stripping and
interest. Capital allocation will continue to focus on the highest return and lowest risk opportunities in line with the
company's value-enhancing strategy and capital austerity programme.
The rand weakened significantly to the US dollar during the second half of 2013. Anglo American Platinum's earnings
remain highly geared to the rand / US dollar exchange rate.
Johannesburg
31 January 2014
ADMINISTRATION
EXECUTIVE DIRECTORS
CI Griffith (Chief executive officer)
B Nqwababa (Finance director)
INDEPENDENT NON-EXECUTIVE DIRECTORS
MV Moosa (Independent non-executive chairman)
RMW Dunne (British)
NP Mageza
NT Moholi
D Naidoo
JM Vice
NON-EXECUTIVE DIRECTORS
M Cutifani (Australian)
KT Kweyama
R Medori (French)
AM O'Neill (Australian)
ALTERNATE DIRECTOR
PG Whitcutt (Alternate director to R Medori)
COMPANY SECRETARY
Elizna Viljoen
elizna.viljoen@angloamerican.com
13th Floor, 55 Marshall Street
Johannesburg 2001
PO Box 62179, Marshalltown 2107
Telephone +27 (0) 11 638 3425
Facsimile +27 (0) 11 373 5111
REGISTERED OFFICE
55 Marshall Street, Johannesburg 2001
PO Box 62179, Marshalltown 2107
Telephone +27 (0) 11 373 6111
Facsimile +27 (0) 11 373 5111
+27 (0) 11 834 2379
SPONSOR
Rand Merchant Bank
a division of FirstRand Bank Limited
REGISTRARS
Computershare Investor Services Proprietary Limited
70 Marshall Street
Johannesburg 2001
PO Box 61051
Marshalltown 2107
Telephone +27 (0) 11 370 5000
Facsimile +27 (0) 11 688 5200
AUDITORS
Deloitte & Touche
Deloitte & Touche Place
The Woodlands
Woodmead
Sandton 2196
INVESTOR RELATIONS
Emma Chapman
emma.chapman@angloamerican.com
Telephone +27 (0) 11 373 6239
3 February 2014
Date: 03/02/2014 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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