Wrap Text
Reviewed condensed consolidated interim financial results for the six months ended 30 June 2015
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)
REVIEWED CONDENSED CONSOLIDATED INTERIM FINANCIAL RESULTS
for the six months ended 30 June 2015
Anglo American Platinum Limited's condensed consolidated reviewed interim financial results for the six months ended 30 June
2015 have been independently reviewed by the Group's external auditors. The preparation of the Group's reviewed interim results
for the six months ended 30 June 2015 was supervised by the Finance Director, Mr I Botha.
PERFORMANCE HIGHLIGHTS
OPERATING PROFIT
2014: R353 million
2015: R3.80 billion
HEADLINE EARNINGS
2014: R157 million
2015: R2.47 billion
LOST-TIME INJURY-FREQUENCY RATE (LTIFR)
per 200,000 hours worked
2014: 0.51
2015: 1.04
REFINED PLATINUM PRODUCTION
2014: 0.86 Moz
2015: 1.10 Moz
EQUIVALENT REFINED PLATINUM PRODUCTION
2014: 0.72 Moz
2015: 1,11 Moz
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Reviewed Audited
six months ended Year ended
30 June 30 June % 31 December
Notes 2015 2014 change 2014
Rm Rm Rm
Gross sales revenue 29,858 27,855 55,626
Commissions paid (4) (10) (14)
Net sales revenue 3 29,854 27,845 7 55,612
Cost of sales 3 (25,530) (26,917) 5 (52,968)
Gross profit on metal sales 3 4,324 928 366 2,644
Other net expenditure 5 (70) (230) (494)
Loss on scrapping of property, plant and equipment (30) (1) (480)
Market development and promotional expenditure (427) (344) (827)
Operating profit 3,797 353 976 843
Net gain on the final phase of the Atlatsa refinancing transaction - 243 243
Impairment of associates - - (168)
Interest expensed (530) (357) (698)
Interest received 89 85 161
Remeasurement of loans and receivables 23 48 201
Losses from associates (net of taxation) (270) (65) (128)
Profit before taxation 3,109 307 913 454
Taxation 6 (682) (5) (82)
Profit for the period/year 2,427 302 704 372
Other comprehensive income, net of income tax
Items that will be reclassified subsequently to profit or loss 9 416 173
Deferred foreign exchange translation gains 126 6 338
Share of other comprehensive gains/(losses) from associates 49 26 (33)
Actuarial loss on employees' service benefit obligation (1) - (5)
Net (losses)/gains on available for sale investments (165) 384 (127)
Total comprehensive income for the period/year 2,436 718 545
Profit/(loss) attributable to:
Owners of the Company 2,444 429 470 624
Non-controlling interest (17) (127) (252)
2,427 302 372
Total comprehensive income/(loss) attributable to:
Owners of the Company 2,453 845 797
Non-controlling interest (17) (127) (252)
2,436 718 545
Headline earnings 7 2,471 157 1,474 786
Number of ordinary shares in issue (millions)* 267.8 267.4 267.5
Weighted average number of ordinary shares in issue (millions) 261.2 261.0 261.1
Weighted average number of potential diluted ordinary shares
in issue (millions) 261.9 262.1 262.4
Earnings per ordinary share (cents)
- Basic 936 164 471 239
- Diluted (basic) 933 164 469 238
* Including 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 incentive schemes.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Reviewed Audited
six months ended as at
30 June 30 June 31 December
Notes 2015 2014 2014
Rm Rm Rm
ASSETS
Non-current assets 66,511 65,850 66,686
Property, plant and equipment 47,755 42,163 44,297
Capital work-in-progress 7,191 11,602 10,736
Investment in associates 8 7,655 7,657 7,637
Investments held by environmental trusts 866 817 842
Other financial assets 9 3,041 3,553 3,120
Other non-current assets 3 58 54
Current assets 23,806 22,215 23,313
Inventories 10 17,998 15,116 17,451
Trade and other receivables 2,808 4,028 3,220
Other assets 595 750 1,440
Other current financial assets 3 - -
Taxation 30 - -
Cash and cash equivalents 2,372 2,321 1,202
Total assets 90,317 88,065 89,999
EQUITY AND LIABILITIES
Share capital and reserves
Share capital 27 27 27
Share premium 22,327 21,813 21,846
Foreign currency translation reserve 1,471 1,013 1,345
Available-for-sale reserve (245) 431 (80)
Retained earnings 29,654 27,309 27,598
Non-controlling interest (274) (54) (210)
Shareholders' equity 52,960 50,539 50,526
Non-current liabilities 22,698 12,792 22,093
Non-current interest-bearing borrowings 11 9,444 372 9,459
Environmental obligations 2,220 1,945 2,110
Employees' service benefit obligations 10 14 8
Deferred taxation 11,024 10,461 10,516
Current liabilities 14,659 24,734 17,380
Current interest-bearing borrowings 11 5,841 14,346 6,361
Trade and other payables 6,963 6,928 7,660
Other liabilities 1,844 2,088 2,044
Other current financial liabilities - 43 -
Share based payment provision 11 26 19
Taxation - 1,303 1,296
Total equity and liabilities 90,317 88,065 89,999
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Reviewed Audited
six months ended as at
30 June 30 June 31 December
2015 2014 2014
Rm Rm Rm
Cash flows from operating activities
Cash receipts from customers 30,196 26,369 55,010
Cash paid to suppliers and employees (23,751) (20,834) (47,134)
Cash from operations 6,445 5,535 7,876
Interest paid (net of interest capitalised) (443) (262) (497)
Taxation paid (1,502) (2,675) (2,734)
Net cash from operating activities 4,500 2,598 4,645
Cash flows used in investing activities
Purchase of property, plant and equipment (includes interest capitalised) (2,390) (2,846) (6,863)
Proceeds from sale of plant and equipment 24 7 34
Distribution from associates - 1 -
Proceeds on sale of mineral rights and other investments 2 - 2
Loans to associates (264) (113) (392)
Advances made to Plateau Resources Proprietary Limited (Plateau) (33) (75) (61)
Advances made to Atlatsa Holdings Proprietary Limited - - (25)
Subscription for Royal Bafokeng Platinum Limited (RB Plat) rights offer shares - (93) (93)
Net decrease/(increase) in investments held by environmental trusts 3 (34) (36)
Interest received 35 28 68
Growth in environmental trusts - - 4
Other advances (1) (37) (36)
Net cash used in investing activities (2,624) (3,162) (7,398)
Cash flows (used in)/from financing activities
Purchase of treasury shares for the Bonus Share Plan (BSP) (120) (327) (327)
Purchase of Anglo American plc shares for the Anglo share schemes (4) - -
(Repayment of)/proceeds from interest-bearing borrowings (535) 2,103 3,204
Cash distributions to minorities (47) (53) (84)
Net cash (used in)/from financing activities (706) 1,723 2,793
Net increase in cash and cash equivalents 1,170 1,159 40
Cash and cash equivalents at beginning of period/year 1,202 1,162 1,162
Cash and cash equivalents at end of period/year 2,372 2,321 1,202
Movement in net debt
Net debt at beginning of period/year (14,618) (11,456) (11,456)
Net cash from operating activities 4,500 2,598 4,645
Net cash used in investing activities (2,624) (3,162) (7,398)
Other (171) (377) (409)
Net debt at end of period/year (12,913) (12,397) (14,618)
Made up as follows:
Cash and cash equivalents 2,372 2,321 1,202
Current interest-bearing borrowings (5,841) (14,346) (6,361)
Non-current interest-bearing borrowings (9,444) (372) (9,459)
(12,913) (12,397) (14,618)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Foreign
currency Available Non-
Share Share translation for sale Retained controlling
capital premium reserve reserve earnings interest Total
Rm Rm Rm Rm Rm Rm Rm
Balance as at 31 December 2013 (audited) 27 21,439 1,007 47 27,362 126 50,008
Total comprehensive income for the period 6 384 455 (127) 718
Deferred tax charged directly to equity 2 2
Share of associates' movements directly to equity 21 21
Cash distribution to minorities (53) (53)
Shares acquired in terms of BSP - treated as
treasury shares (-)* (327) (327)
Shares vested in terms of the BSP -* 250 (250) -
Shares vested in terms of the group Employee Share
Option Scheme (Kotula) -* 451 (451) -
Equity-settled share-based compensation 196 196
Shares purchased for employees (26) (26)
Balance as at 30 June 2014 (reviewed) 27 21,813 1,013 431 27,309 (54) 50,539
Total comprehensive loss for the period 332 (511) 131 (125) (173)
Deferred tax charged directly to equity (3) (3)
Share of associates' movements directly to equity 7 7
Cash distributions to minorities (31) (31)
Shares vested in terms of the BSP -* 57 (57) -
Shares vested in terms of the group Employee Share
Option Scheme (Kotula) (-)* (24) 24 -
Equity-settled share-based compensation 186 186
Shares purchased for employees 1 1
Balance as at 31 December 2014 (audited) 27 21,846 1,345 (80) 27,598 (210) 50,526
Total comprehensive income for the period 126 (165) 2,492 (17) 2,436
Deferred tax charged directly to equity 1 1
Cash distributions to minorities (47) (47)
Shares acquired in terms of BSP - treated as
treasury shares (-)* (255) 135 (120)
Shares vested in terms of the BSP -* 285 (285) -
Shares vested in terms of the group Employee Share
Option Scheme (Kotula) -* 451 (451) -
Equity-settled share-based compensation 164 164
Balance as at 30 June 2015 (reviewed) 27 22,327 1,471 (245) 29,654 (274) 52,960
* Less than R500 000.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
for the six months ended 30 June 2015
1. The condensed consolidated interim financial statements are prepared in accordance with International Financial Reporting
Standard, IAS 34 Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices
Committee and Financial Pronouncements as issued by Financial Reporting Standards Council and the requirements of the
Companies Act of South Africa. The accounting policies applied in the preparation of these condensed consolidated interim
financial statements are in terms of International Financial Reporting Standards and are consistent with those applied in the
financial statements for the year ended 31 December 2014, except for the adoption of various amendments to accounting
standards in the six months ended 30 June 2015. These changes did not have a material impact on the financial results of the
Group.
The directors take full responsibility for the preparation of the condensed report and that financial information has been correctly
extracted from the underlying reviewed condensed consolidated interim financial statements.
2. SEGMENTAL INFORMATION
Net sales revenue Operating contribution
Reviewed Audited Reviewed Audited
Six months ended Year ended Six months ended Year ended
30 June 30 June 31 December 30 June 30 June 31 December
2015 2014 2014 2015 2014 2014
Rm Rm Rm Rm Rm Rm
Operations
Mogalakwena Mine 7,216 6,688 13,779 3,174 2,669 5,075
Amandelbult Mine 4,015 3,400 6,264 398 (819) (776)
Unki Mine 1,035 1,043 2,107 132 209 368
Twickenham Mine 145 192 367 (386) (186) (522)
Modikwa Mine1 729 734 1,517 52 82 170
Mototolo Mine1 731 782 1,570 232 280 510
Kroondal Mine1 1,502 1,453 2,990 392 377 583
Rustenburg Mine 5,422 4,745 8,861 409 (919) (777)
Union Mine 1,862 1,704 3,159 (10) (623) (734)
Total - mined 22,657 20,741 40,614 4,393 1,070 3,897
Process tailings retreatment2 30 - - (4) - -
Purchased metals 7,167 7,104 14,998 1,223 954 1,552
29,854 27,845 55,612 5,612 2,024 5,449
Other costs (Note 4) (1,288) (1,096) (2,805)
Gross profit on metal sales 4,324 928 2,644
1 Anglo American Platinum Limited's share (excluding purchase of concentrate).
2 Slag tailings retreatment at Mortimer Smelter scheduled for closure in September 2015.
Information reported to the Executive Committee of the Group for purposes of resource allocation and assessment of
segment performance is done on a mine by mine basis.
Changes to the segmental information
The following changes to the segmental reporting were made following changes to internal reporting to the Executive
Committee:
During the current year, the Group restructured its business around large mining complexes, consolidating adjacent
mines with the concentrating operations. As a result, the following segments were consolidated into single reporting
segments:
Tumela Mine and Dishaba Mine were consolidated into Amandelbult Mine; and
Bathopele Mine, Thembelani Mine, Siphumelele Mine and Western Limb Tailings Retreatment were consolidated
into Rustenburg Mine.
Accordingly, the comparative figures have been aggregated to reflect this change.
In addition, in the results for the six months ended 30 June 2014, the results from chrome refining activities were
included in the Chrome refining segment. However, for the year ended 31 December 2014, the results from the
Chrome refining segment were included in the results of the mines that were the source of the chrome for each
plant. Consequently, the Chrome refining results for the period ended 30 June 2014 were reclassified in a similar
manner. This resulted in the following changes to the results for 30 June 2014:
Net sales revenue and operating contribution from Chrome refining decreasing to nil;
Net sales revenue and operating contribution of Union Mine increasing by R150 million and R145 million
respectively; and
Net sales revenue and operating contribution of Rustenburg Mine increasing by R2 million and decreasing by R20
million respectively.
Reviewed Audited
six months ended as at
30 June 30 June 31 December
2015 2014 2014
Rm Rm Rm
3. GROSS PROFIT ON METAL SALES
Gross sales revenue 29,858 27,855 55,626
Commissions paid (4) (10) (14)
Net sales revenue 29,854 27,845 55,612
Cost of sales (25,530) (26,917) (52,968)
On-mine (16,347) (12,336) (29,029)
Cash operating costs (14,310) (10,724) (25,391)
Depreciation (2,037) (1,612) (3,638)
Purchase of metals (5,110) (5,953) (12,411)
Smelting (1,586) (1,406) (3,051)
Cash operating costs (1,353) (1,155) (2,518)
Depreciation (233) (251) (533)
Treatment and refining (1,637) (1,413) (2,969)
Cash operating costs (1,295) (1,084) (2,302)
Depreciation (342) (329) (667)
Increase/(decrease) in metal inventories 438 (4,713) (2,703)
Other costs (Note 4) (1,288) (1,096) (2,805)
Gross profit on metal sales 4,324 928 2,644
Gross profit margin (%) 14.5 3.3 4.8
4. OTHER COSTS
Other costs comprise the following principal categories:
Share-based payments - other share schemes 137 139 254
Share-based payments - The Kotula Trust (Group ESOP) 31 64 128
Corporate costs 257 200 556
Royalties 267 177 374
Contributions to education and community development 138 176 508
Research 127 99 329
Transport of materials 158 116 278
Exploration 49 41 129
Other 124 84 249
1,288 1,096 2,805
5. OTHER NET EXPENDITURE
Other net expenditure consists of the following principal
categories:
Net realised and unrealised foreign exchange gains 282 55 218
Project maintenance costs* (67) (13) (9)
Restructuring and other related costs (345) (337) (755)
(Loss)/profit on disposal of property, plant and equipment; and (10) 2 59
conversion rights
Other - net 70 63 (7)
(70) (230) (494)
* Project maintenance costs comprise costs incurred to maintain land held for future projects and costs to keep
projects on care and maintenance. It also includes the costs of the operations put onto care and maintenance once
the decision was made.
Reviewed Audited
six months ended as at
30 June 30 June 31 December
2015 2014 2014
% % %
6. 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 tax rate 28.0 28.0 28.0
Disallowable items 2.6 18.9 10.8
Capital profits - (22.1) (15.0)
Impairment of associate - - 10.4
Prior year (over)/underprovision (0.1) 30.4 20.9
Effect of after-tax share of losses from associates 2.4 5.9 7.9
Effective tax rate adjustment (6.0) (13.7) -
Difference in tax rates of subsidiaries (4.1) (64.2) (60.0)
Deferred taxation asset not raised - 1.1 -
Other (0.9) 17.3 15.1
Effective tax rate 21.9 1.6 18.1
Rm Rm Rm
7. RECONCILIATION BETWEEN PROFIT AND HEADLINE EARNINGS
Profit attributable to owners of the company 2,444 429 624
Adjustments
Net loss/(profit) on disposal of property, plant and equipment 10 (40) (77)
Tax effect thereon (3) 11 22
Net gain on the final phase of the Atlatsa refinancing transaction - (243) (243)
Profit on sale of other mineral rights and investments (2) (1) (2)
Impairment of associates - - 168
Loss on scrapping of property, plant and equipment 30 1 480
Tax effect thereon (8) - (134)
Non-controlling interests' share - - (52)
Headline earnings 2,471 157 786
Attributable headline earnings per ordinary share (cents)
Headline 946 60 301
Diluted 943 60 300
8. INVESTMENT IN ASSOCIATES
Listed (Market value: R169 million (30 June 2014: R563 million;
31 December 2014: R288 million))
Investment in Atlatsa Resources Corporation 623 769 689
Unlisted 7,032 6,888 6,948
Bokoni Platinum Holdings Proprietary Limited
Carrying value of investment 719 957 880
Loans to associate 28 - -
Bafokeng-Rasimone Platinum Mine
Carrying value of investment 5,861 5,359 5,637
Investment in Johnson Matthey Fuel cells
Carrying value of investment - (176) -
Cumulative redeemable preference shares - 127 -
Loan to associate (subordinated to third party debt) - 210 -
Richtrau No 123 Proprietary Limited
Carrying value of investment 5 5 5
Peglerae Hospital Proprietary Limited
Carrying value of investment 64 57 64
Unincorporated associate - Pandora
Carrying value of investment 355 349 362
7,655 7,657 7,637
The market value disclosed for the listed investment in an associate is categorised as Level 1 as per the fair
value hierarchy. The intrinsic value supports the carrying value of the investment.
Reviewed Audited
six months ended as at
30 June 30 June 31 December
2015 2014 2014
Rm Rm Rm
9. OTHER FINANCIAL ASSETS
Loans carried at amortised cost
Loans to Plateau Resources Proprietary Limited 1,203 1,080 1,135
Loan to Atlatsa Holdings Proprietary Limited 336 255 326
Loan to ARM Mining Consortium Limited 66 70 66
Advances to Bakgatla-Ba-Kgafela traditional community 171 155 163
Other 75 99 75
1,851 1,659 1,765
Available-for-sale investments carried at fair value
Investment in Royal Bafokeng Platinum Limited 1,042 1,591 1,181
Investment in Wesizwe Platinum Limited 148 275 174
Food Freshness Technology Holdings - 28 -
3,041 3,553 3,120
10. INVENTORIES
Refined metals 3,144 4,547 4,598
At cost 1,901 3,999 2,432
At net realisable values 1,243 548 2,166
Work-in-process 12,248 8,396 10,356
At cost 7,881 7,769 7,067
At net realisable values 4,367 627 3,289
Total metal inventories 15,392 12,943 14,954
Stores and materials at cost less obsolescence provision 2,606 2,173 2,497
17,998 15,116 17,451
11. INTEREST-BEARING BORROWINGS
The Group has the following borrowing facilities:
Committed facilities 22,329 22,356 22,344
Uncommitted facilities 9,547 9,570 8,723
Total facilities 31,876 31,926 31,067
Less: Facilities utilised (15,285) (14,718) (15,820)
Non-current interest bearing borrowings* (9,444) (372) (9,459)
Current interest bearing borrowings* (5,841) (14,346) (6,361)
Available 16,591 17,208 15,247
Weighted average borrowing rate (%) 7.29 7.01 7.32
* Includes R9,100 million and R5,812 million owing to Anglo American SA Finance Limited on the committed and
uncommitted facilities respectively as at 30 June 2015.
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. R18,529 million (30 June 2014: R7,957 million; 31 December 2014:
R18,544 million) of the facilities is committed for one to five years; R2,300 million (30 June 2014: R2,300 million;
31 December 2014: R2,300 million) is committed for a rolling period of 364 days; while the rest is committed for
less than 364 days. The Group has adequate committed facilities to meet its future funding requirements.
The maturities of committed facilities amounting to R9,057 million have been extended post 30 June 2015 for a
further year resulting in their maturity dates extending to 2018.
12. FAIR VALUE DISCLOSURES
This announcement does not include the information required pursuant to paragraph 16A(j) of IAS 34. The full
interim report is available on the Company's website, at the Company's registered offices and upon request.
Reviewed Audited
six months ended as at
30 June 30 June 31 December
2015 2014 2014
Rm Rm Rm
13. COMMITMENTS
Mining and process property, plant and equipment
Contracted for 1,844 2,943 2,117
Not yet contracted for 9,231 13,372 8,864
Authorised by the directors 11,075 16,315 10,981
Allocated for:
Project capital 6,304 9,115 6,817
- within one year 1,656 4,269 2,376
- thereafter 4,648 4,846 4,441
Stay in business capital 4,771 7,200 4,164
- within one year 3,641 6,022 2,774
- thereafter 1,130 1,178 1,390
Capital commitments relating to the group's share in associates
Contracted for 464 424 331
Not yet contracted for 1,806 2,176 1,961
Authorised by the directors 2,270 2,600 2,292
Other
Operating lease rentals - buildings and equipment 292 216 203
Due within one year 129 81 103
Due within two to five years 163 133 100
More than five years - 2 -
These commitments will be funded from existing cash resources, future operating cash flows, borrowings and any
other funding strategies embarked on by the Group.
14. CHANGES IN ACCOUNTING ESTIMATE FOR INVENTORY
During the current period, the Group changed its estimate of the quantities of inventory based on the outcome of a
physical count of in-process metals. The Group runs a theoretical metal inventory system based on inputs, the
results of previous counts and outputs. Due to the nature of in-process inventories being contained in weirs, pipes
and other vessels, physical counts only take place once per annum, except in the Precious Metal Refinery, which
takes place once every five years.
This change in estimate has had the effect of increasing the value of inventory disclosed in the financial statements
by R2,175 million (30 June 2014: decrease of R55 million; 31 December 2014: decrease of R116 million). This
results in the recognition of an after tax gain of R1,566 million (30 June 2014: after-tax loss of R40 million;
31 December 2014: after-tax loss of R84 million).
15. UNKI PLATINUM MINE INDIGENISATION PLAN
The Group advises that the proposed 51% indigenisation plan has not yet been implemented and discussions
around the indigenisation plan and its implementation remain ongoing. Stakeholders will be kept informed of any
material developments in this regard.
16. POST BALANCE SHEET EVENTS
There have been no material events subsequent to 30 June 2015.
17. AUDITOR'S REVIEW
The interim report has been reviewed by the Company's auditors, Deloitte & Touche. The review of the condensed
consolidated interim financial statements was performed in accordance with ISRE 2410, Review of Interim Financial
Information Performed by the Independent Auditor of the Entity. The auditor's review report 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 auditor's
review report together with the accompanying financial information from the Company's registered office. Their
unmodified review report on the Group's condensed consolidated interim financial statements 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.
INTERIM GROUP PERFORMANCE DATA (unaudited)
for the six months ended 30 June 2015
SALIENT FEATURES
Six months ended Year ended
30 June 30 June 31 December
2015 2014 % change 2014
Average market prices achieved
Platinum US$/oz 1,160 1,436 (19) 1,386
Palladium US$/oz 779 773 1 803
Rhodium US$/oz 1,133 1,069 6 1,147
Gold US$/oz 1,198 1,293 (7) 1,259
Nickel US$/lb 6.11 7.67 (20) 7.73
Copper US$/lb 2.42 3.05 (21) 3.14
US$ basket price - Pt
(net sales revenue per Pt oz sold) US$/oz Pt sold 2,157 2,474 (13) 2,413
US$ basket price - PGM
(net sales revenue per PGM oz sold) US$/oz PGM sold 1,038 1,123 (8) 1,164
R basket price - Pt
(net sales revenue per Pt oz sold) R/oz Pt sold 25,748 26,493 (3) 26,219
R basket price - PGM
(net sales revenue per PGM oz sold) R/oz PGM sold 12,394 12,025 3 12,656
Exchange rates
Average exchange rate achieved on sales ZAR/US$ 11.94 10.71 11 10.87
Exchange rate at end of the period/year ZAR/US$ 12.14 10.64 14 11.57
Unit cost performance
Cash on-mine cost/tonne milled R/tonne 737 795 (7) 770
Cash operating cost per refined Pt ounce1 R 20,108 20,554 (2) 22,082
Cost of sales per total Pt ounce sold2 R 22,019 25,633 (14) 24,983
Productivity
m2 per total operating employee per month3 6.53 6.61 (1) 6.46
Refined platinum ounces per employee4 29.5 22.2 33 23.3
Financial statistics
Gross profit margin % 14.5 3.3 339 4.8
Operating profit as a % of average operating assets % 11.2 1.1 918 1.3
EBITDA R million 6,154 2,587 138 5,658
Return on average shareholders' equity % 6.4 1.2 433 0.7
Return on average capital employed % 7.4 1.1 573 1.2
Return on average attributable capital employed % 7.9 1.2 558 1.3
Current ratio 1.6:1 0.9:1 78 1.3:1
Debt:Equity ratio 1:3.5 1:3.4 3 1:3.2
Interest cover - EBITDA times 9.4 5.1 85 5.3
Debt coverage ratio times 0.4 0.4 - 0.5
Net debt to capital employed % 19.6 19.7 (1) 22.4
Interest-bearing debt to shareholders' equity % 28.9 29.1 (1) 31.3
Net asset value as a % of market capitalisation % 71.6 40.6 76 54.9
Effective tax rate % 21.9 1.6 1,269 18.1
Market information and share statistics
Total shares in issue (net of treasury shares) millions 267.8 267.4 - 267.5
Weighted average number of shares in issue millions 261.2 261.0 - 261.1
Treasury shares held millions 1.9 2.3 (17) 2.2
Market capitalisation R billion 74.0 124.4 (41) 92.0
Closing share price cents 27,422 46,107 (41) 34,112
1 Cash operating cost per 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.
3 Square metres mined per operating employee including processing but excluding projects, opencast and Western Limb
Tailings Retreatment employees.
4 Refined platinum ounces per operating employee; Mined refined production divided by the sum of all own and Anglo
American Platinum's attributable joint-venture operational employees.
REFINED PRODUCTION
Six months ended Year ended
30 June 30 June 31 December
2015 2014 % change 2014
Total operations
Refined production from mining operations
Platinum 000 oz 820.5 607.3 35 1,323.8
Palladium 000 oz 569.7 423.5 35 921.1
Rhodium 000 oz 103.5 72.8 42 154.1
Gold 000 oz 49.6 39.3 26 74.0
PGMs 000 oz 1,661.0 1,205.4 38 2,641.9
Nickel 000 tonnes 10.3 12.5 (18) 23.9
Copper 000 tonnes 7.2 8.8 (18) 15.6
Chrome 000 tonnes 192.8 73.2 163 289.2
Refined production from purchases
inclusive of returns
Platinum 000 oz 282.5 248.5 14 565.7
Palladium 000 oz 166.1 127.8 30 304.3
Rhodium 000 oz 38.4 36.5 5 75.3
Gold 000 oz 10.9 12.8 (15) 21.6
PGMs 000 oz 550.5 499.8 10 1,092.9
Nickel 000 tonnes 1.8 2.0 (10) 4.3
Copper 000 tonnes 1.0 1.8 (44) 3.1
Chrome 000 tonnes - - - -
Total refined production
Platinum 000 oz 1,103.0 855.8 29 1,889.5
Palladium 000 oz 735.8 551.3 33 1,225.4
Rhodium 000 oz 141.9 109.3 30 229.4
Gold 000 oz 60.5 52.1 16 95.6
PGMs 000 oz 2,211.5 1,705.2 30 3,734.8
Nickel - Refined 000 tonnes 11.7 10.4 13 20.5
Nickel - Matte 000 tonnes 0.4 4.1 (90) 7.7
Copper - Refined 000 tonnes 7.9 7.0 13 12.5
Copper - Matte 000 tonnes 0.3 3.6 (92) 6.2
Chrome 000 tonnes 192.8 73.2 163 289.2
PIPELINE CALCULATION
Six months ended Year ended
30 June 30 June 31 December
2015 2014 % change 2014
Total operations
Equivalent refined platinum production1 000 oz 1,108.1 715.2 55 1,841.9
Mogalakwena Mine 201.2 184.8 9 369.8
Amandelbult Mine 182.3 33.9 438 210.8
Unki Mine 31.7 29.8 6 61.3
Twickenham Mine 5.0 5.9 (15) 11.4
Modikwa Mine 46.2 50.2 (8) 103.0
Mototolo Mine 55.2 60.6 (9) 120.0
Kroondal Mine 127.2 125.2 2 252.2
Bafokeng-Rasimone Platinum Mine2 77.6 85.1 (9) 186.9
Rustenburg Mine 236.6 59.2 300 276.5
Union Mine 61.9 10.8 473 86.9
Bokoni Mine3 48.7 49.6 (2) 106.9
Total mined 1,073.6 695.1 54 1,785.7
Mogalakwena Mine sale of concentrate - (5.3) (100) (5.3)
Process tailings retreatment4 2.7 - 100 -
Purchases from third parties 31.8 25.4 25 61.5
Pipeline stock adjustment 131.3 26.5 395 26.5
Refined platinum production
(excl. toll refined metal) (1,102.9) (855.7) 29 (1,887.2)
Mining (820.5) (607.3) 35 (1,323.8)
Purchases of concentrate (282.4) (248.4) 14 (563.4)
Platinum pipeline movement 136.5 (114.0) 220 (18.8)
1 Mines' production and purchases of metal in concentrate, secondary metals and other metals converted to equivalent
refined production using Anglo American Platinum's standard smelting and refining recoveries.
2 Associate with effect from 1 November 2010.
3 Associate with effect from 1 July 2009.
4 Slag tailings retreatment at Mortimer Smelter scheduled for closure in September 2015.
RESULTS COMMENTARY 2015
OPERATIONS
Safety, Health and Welfare
Tragically we had two losses of life due to work related incidents during the first half of 2015. Mr Michael Malesa
was fatally injured when he was struck by a utility vehicle underground at Twickenham mine on 26 January and
Mr Joseph Khesa sustained fatal injuries in a fall of ground at Thembelani mine on 12 May. Our deepest
condolences go to the families, friends and colleagues of Mr Malesa and Mr Khesa.
Anglo American Platinum's lost-time-injury-frequency-rate (LTIFR) is 1.04 which is marginally higher than the
normalised strike impacted LTIFR for 2014. The Company continues to strive for zero harm, and has a well-
established safety strategy in place to drive this ambition.
Significant efforts have been made to improve our disease awareness and prevention programmes. The Company
has seen a significant increase in employee participation in the Disease Management Plan (DMP) in 2015 - an
increase of 12% compared to the same period in 2014. The encouraging uptake of anti-retroviral treatment has also
increased during the year, with early signs of reductions of HIV/AIDs and Tuberculosis related deaths. The
Company has implemented support mechanisms, and increased our Tuberculosis prevention efforts through
various awareness and social campaigns, underpinned with active management of cases.
Energy and water consumption were once again reduced during the period, with lower energy consumption
contributing towards lowering the demand for electricity on Eskom. These energy reducing initiatives, as well as
current load-shedding have not impacted production. Anglo American Platinum aims to reduce demand on the
national grid, and has proactively implemented a pilot project with the Department of Science and Technology to
supply power to three schools in Cofimvaba in the Eastern Cape. The project uses platinum-based hydrogen fuel
cell technology to generate power and supports our platinum demand development programme. This project is in
addition to our off-grid fuel cell powering a community outside Kroonstad.
Employee indebtedness has a significant impact on employee safety and health, employee well-being and morale.
Anglo American Platinum has created an indebtedness programme to assist employees in managing their debt and
empowering them by reducing levels of indebtedness, increase financial literacy and increase levels of debt
rehabilitation. As part of this programme to improve the situation for employees who are in debt and under
administration orders the Company has decided to take legal action against attorneys and debt administrators who
are believed to have acted unlawfully. Anglo American Platinum will pursue these cases in the interest of
employees and await the outcome of the case.
The Farlam report was released on 25 June 2015, following an investigation into the circumstances surrounding the
Marikana tragedy. Anglo American Platinum was not specifically the focus of the Commission, but is reviewing the
report in the context of its own approach and programmes regarding, amongst others, the underlying social issues
that need to be addressed, employee relations and management practices, and protection services practices.
Operational performance
Whilst the comparative period was materially impacted by the 5-month
industrial action, the first half of 2015'soperational performance benefited from the restructuring and
improvement introduced since the Platinum Review in 2013. Total equivalent refined platinum production
(equivalent ounces are mined ounces expressed as refined ounces) from the mines managed directly by the
Company and joint venture operations for the six months to 30 June 2015 ("the period") was 1,108koz,
a 55% increase versus the first half of 2014 ("the comparative period"). On a strike-adjusted basis, and
accounting for mine closures in 2014, equivalent refined production year-on-year showed operational momentum.
Production that stopped due to the closure of the Union mine declines was offset by improved operational
performance.
Mogalakwena mine continued its strong performance, with a further improvement in production to 201koz, up 9%.
Production includes 11koz processed at the Baobab concentrator, marginally lower compared to the same period in
2014. Excellent mining performance resulted in higher grade ore being delivered to the concentrators, and with
higher concentrator throughput and recoveries, resulted in higher ounce production. Tonnes mined increased by
4%, due to increased utilisation and management of overall equipment effectiveness (OEE) of the fleet. Direct on-
mine costs decreased by 11% year-on-year due to improved mining performance, lower diesel input costs and the
result of business improvement initiatives. As a result of increased production and cost management, cash cost per
equivalent refined platinum ounce improved year-on-year, down 7% to R16,478 from R17,774. The basket price per
platinum ounce at Mogalakwena for the period under review was R34,686 resulting in the mine achieving a 44%
operating margin while delivering some R2.6 billion in free cash flow (available cash after cash costs and stay in
business (SIB) capital expenditure). Anglo American Platinum forecasts that Mogalakwena will exceed its target
production for full year 2015 including the portion of concentrate which is treated at the Baobab concentrator, and
likely produce 380 koz.
Amandelbult mine's equivalent refined platinum production increased by 148koz against the strike affected
comparative period, however the production performance was 13% down on a strike adjusted basis. The first
quarter performance was affected by section 54 safety stoppages impacting 36 days of production, as well as
regional water supply disruptions which impacted on the concentrator. The second quarter saw a good production
performance recovery, with a 26% improvement in platinum ounces produced on the previous quarter.
Unki mine produced 32koz equivalent refined platinum ounces, 6% higher than the comparative period. However,
only 23koz of concentrate was dispatched to Polokwane Smelter, after the Company suspended exports of
concentrate on 10 April 2015 as negotiations with the Government of Zimbabwe over export taxes were undertaken.
Following the Government agreed postponement of the taxes, the export of concentrate re-commenced on 3 July
2015, with 12,300 tonnes of concentrate stockpiled at the mine at the end of the period all of which will be
processed during the second half of this year.
Rustenburg mines including Western Limb Tailings Retreatment had a strong production performance in the period,
up 177koz. As the mine was impacted by the industrial action in the comparative period, performance was up 4%
on a strike adjusted basis. Rustenburg 4E production from underground operations in H1 was the best performance
since 2011. Rustenburg has been consolidated into three mines from five mines, and is in the process of
implementing the optimised mine plan. Progress on the plan has led to increased stope-able reserves, improved
productivity and increased profitability.
Union mine produced 62koz, up 51koz year-on-year. On a strike adjusted basis and adjusting for the south decline
closure, production was down by 16% or 12 koz primarily due to planned reductions of marginal production and
lower stope-able reserves at the two vertical shafts. This was exacerbated by Section 54 safety stoppages and the
regional water shortage. Union mine has a new optimised mine plan which should see a dramatic improvement in
profitability. Union was consolidated from two mines to one, reducing production at the marginal areas. The declines
were closed as they were uneconomic and as such the production profile of the mine reduced, enabling the closure
of surplus concentrators and reduction in overheads. Production recovery began to see traction in the second
quarter and sustained production build up at the vertical shafts is anticipated as the mine increases reserves over
the next two years. Focus remains on ensuring the mine continues to improve performance in line with its optimised
mine plan.
Equivalent refined platinum production from joint ventures and associates, inclusive of both mined and purchased
production, decreased by 4% year-on-year to 355koz. The joint venture portfolio was mainly impacted by section 54
stoppages equating to 20koz of lost production, reduction in grade at Mototolo due to mining through difficult ground
conditions and plant maintenance related stoppages at BRPM.
Equivalent refined platinum ounces purchased from third parties increased by 25% year-on-year from 25koz to
32koz.
Section 54 safety stoppages have impacted production in the period across almost all operations. The Principle and
Chief Inspectors have been engaged to ensure the impact of these notices can be limited and that Section 54s are
used as a last resort by the regulator.
Total refined platinum production of 1,103koz in the first half of 2015 was up 29% due to a 44% increase in milled
volumes compared to the strike affected comparative period.
Base metal production of nickel and copper tonnes returned to normal levels as the nickel tank house has ramped-
up to full capacity. The base metal refinery's production increased by 20% due to greater stability in the plant as
well an increase in production from Mogalakwena whose ore is rich in base metals. Production of nickel, however,
decreased by 17% to 12,078 tonnes while copper production decreased by 23% to 8,204 tonnes due to the
reduction in the amount of nickel copper matte toll treated.
Refined platinum sales volumes increased 11% to 1.16 million ounces versus the previously strike impacted
performance in 2014 of 1.04 million ounces. Platinum sales were higher than refined production by 56koz resulting
in a drawdown in refined stock primarily due to the smelter rebuild at the Waterval complex which was completed in
the first half of the year. A physical count of in-process metals (in the ordinary course of business) resulted in the
Company increasing its estimate of the quantity of inventory by an additional c.130koz of platinum and 75 koz of
palladium.
"Equivalent refined production" which is the operational production performance metric for Anglo American Platinum
calculated as mines' production and purchases of metal in concentrate converted to equivalent refined production
using internal standard smelting and refining recoveries will be discontinued following the interim reporting period
and replaced by "platinum ounces produced" i.e. mines' production and purchases of metal in concentrate.
FINANCIAL PERFORMANCE
Overview
The financial performance of the Company improved significantly in the first half of 2015 over the comparative
period, despite a steep decline in the dollar prices for most metals. Headline earnings increased to R2.5 billion from
R157 million in the first half of 2014. Profit attributable to ordinary shareholders amounted to R2.4 billion, due to the
improvement in operational performance following the protected industrial action in the comparative period, an
increase in sales volumes and weakening of the South African Rand versus the US dollar, which was partially offset
by sharply weaker dollar pricing. In addition, the Company has increased its estimate of the quantity of inventory
based on the outcome of the physical count of in-process metals, which resulted in an after-tax gain of R1,566
million. The R2.4 billion profit attributable to ordinary shareholders compares to R429 million in 2014, which was
negatively impacted by the five month long industrial action, partially mitigated by sales from inventory during this
period.
Attributable profit for the period was 936 cents per share compared to 164 cents per share in the comparative
period while headline earnings per share rose from 60 cents to 946 cents per share.
Sales and working capital
Net sales revenue increased 7% to R29.9 billion from the R27.8 billion in the first half of 2014, due primarily to
increased sales volume of platinum, palladium and rhodium and the impact of the weakening of the Rand / US
dollar exchange rate. This was partly offset by lower sales volume of nickel, iridium and ruthenium, and exacerbated
by lower dollar metal prices, in particular for platinum and nickel.
Refined platinum sales for the half year increased to 1.16 million platinum ounces, up 11% over the comparative
period. Sales of refined palladium and rhodium increased 27% and 25% respectively. Nickel sales declined 11% as
the tolling of nickel copper matte finished at the end of 2014.
The average US dollar basket price per platinum ounce sold decreased 13% in 2015 to $2,157, from the US$2,474
achieved in 2014. The decline was driven by the decrease in prices for platinum, gold, ruthenium, nickel and
copper. The average US dollar sales price achieved on platinum declined by 19% to US$1,160 per ounce. The
palladium price remained constant for most of the period, but fell sharply in June 2015, while the rhodium price
increased 6% year on year. Nickel and copper prices fell 20% and 21% respectively.
The average rand/US dollar exchange rate weakened by 11% to R11.94: US$1.00 from the R10.71 average during
the comparative period. After taking into account the effect of the weakening of the Rand against the US dollar, the
average realised Rand basket price per platinum ounce was 3% weaker at R25,748.
Working capital increased by R510 million to R15.1 billion as at 30 June 2015 including R2.2 billion arising from the
positive adjustment to inventory from the annual stock count. Working capital days increased to 78 days from 66
days, mainly as a result of the stock count adjustment.
The stock count indicated an additional 130koz of platinum and 75koz of palladium, in the processing facilities.
These ounces, together with minor changes in rhodium and nickel, were valued at R2.2 billion (pre-tax) and are
included in the movement in metal inventories in earnings. The physical stock count is conducted on an annual
basis, but the strike impact and change in production mix created huge variability in 2014. It is unusual for all
material metal variances to be up in a particular year, however that was the case this year which is what resulted in
a larger than normal increase in inventory.
Costs
Cost of sales decreased by 5%, from R26.9 billion to R25.5 billion mainly as a result of strict cost control, and a
credit to cost of sales for the R2.2 billion inventory adjustment. This led to a year on year movement in non-cash
costs of c.R5.1 billion (moving from a decrease of R4.7 billion in 2014 to an increase of R0.4 billion in 2015).
Cash operating production costs (cash mining, smelting, treatment and refining costs) increased by 31% to R17.0
billion from R13.0 billion in the first half of 2014. The higher comparative costs are primarily as a result of increased
mining, milling and refined volumes as compared to the comparative period which was affected by the five month
long industrial action. Strict cost management contributed to limiting the increase in costs to below mining inflation.
Costs for purchases of metals reduced by 14% from R6.0 billion in 2014, to R5.1 billion in 2015. The lower costs are
ascribed to the lower dollar metal prices used in determining the cost of purchased metals and marginally lower
volume purchased, somewhat offset by the weaker ZAR/USD exchange rate.
Cash operating cost per equivalent refined platinum ounce (excluding projects) was R19,386, down 30% from the
R27,810 recorded for the first half of 2014. The 2015 unit cost increased by 5% compared to the strike adjusted unit
cost of R18,494 for 2014.
Earnings before interest and tax (EBIT)
EBIT increased R3.44 billion to R3.8 billion from R353 million recorded in the first half of 2014. Positive
contributions to EBIT for the half year included the weakening of the Rand against the US dollar contributing R2.7
billion; additional margin from higher sales volumes amounting to R398 million; lower cash costs of R228 million and
the strike impact of 2014 adding R1.7 billion. Earnings were further supported by R2.2 billion arising from the positive
adjustment to inventory from the annual stock count. These increases were partly offset by the decline in metal prices
of R2.6 billion, CPI inflation of R766 million, higher amortisation costs of R209 million and restructuring costs of
R200 million.
Cash flow
The Company generated R6.4 billion in cash from its operations which was R0.9 billion more than the R5.5 billion
generated in the first half of 2014. These cash flows were primarily used to pay taxation, including the final once-off
payment of R1.1 billion; interest of R664 million; fund capital expenditure of R2.2 billion (excluding capitalised
interest) and contribute to the funding of associates of R297 million.
Net debt and dividend
Net debt declined by R1.7 billion from the December 2014 close of R14.6 billion owing to improved operational cash
flows, generating R2.8 billion of cash.
Owing to the net debt position of the Company and considering future funding requirements, the Board decided not
to declare an interim dividend in 2015. 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.
Delivering value
Anglo American Platinum has taken decisive action to significantly reduce costs and manage cash flows. Having
critically reviewed the portfolio of expansion projects and SIB capital expenditure, the Company seeks to reduce
cash outflow by R6 billion from a reduction in capital expenditure over the next two years. Anglo American Platinum
is redefining its business to focus around large mining complexes, consolidating adjacent mines with the
concentrating operations and has proposed the right-sizing of its indirect labour which service and support the
operations. This restructuring is expected to reduce the indirect labour by c. 400 employees at a labour cost of
around R200 million per annum. In addition, non-labour cost savings of around R600 million per annum have been
identified. These include a reduction in the use of management advisory services, ensuring our exploration
programme and project studies (concept and pre-feasibility) are aligned to our optimised portfolio of assets and
investment time horizon, reducing the complexity in our information technology systems, and reduction of other non-
essential costs.
Capital expenditure
Capital allocation remains a priority for Anglo American Platinum and an extensive capital review programme was
undertaken at the beginning of the year. Taking into account market demand, balance sheet constraints and the
current weak commodity price environment, projects have been delayed and will be re-evaluated at the end of
2016. In conjunction, projects have been re-designed, e.g. Unki smelter, Twickenham mechanised mine, low capital
Amandelbult ore replacement, into lower capital intensive options.
Capital allocation, for both SIB and projects has been deployed efficiently and effectively during the first half of 2015
by following the stricter governance processes implemented during the second half of 2014. This optimisation
process will ensure that we prioritise capital spend and adequately manage business risk on an ongoing basis.
As a result, total capital expenditure inclusive of Mogalakwena mine waste stripping was R2.17 billion for 2015,
down 17% against R2.6 billion in H1 2014. SIB capital expenditure was R450 million down from R1.5 billion in 2014
while projects were R131 million down from R736 million. Capitalised waste stripping amounted to R543 million up
35% from R403 million capitalised in 2014.
Tax on the export of unbeneficiated platinum from Zimbabwe
In the 2015 National Budget Statement of Zimbabwe, the Minister of Finance proposed the deferment of the 15%
export levy on unbeneficiated platinum to January 2017. However, the Finance Act which gives legal effect to the
budget proposals did not include the deferment of the 15% tax making the previously gazetted effective date of 1
January 2015 valid. Extensive engagements with the Government of Zimbabwe have been undertaken with an
agreement reached on future smelting operations in Zimbabwe, resulting in the Government once again agreeing to
a deferment of the royalty. The Finance Act, which legalises the budget proposals, is being progressed and it is
anticipated the deferment of the tax will be announced in due course.
MARKETS
Platinum
Commodity markets came under significant pressure in the first half of 2015, with a constant decline in PGM prices
as underlying fundamentals were outweighed by the current global macro-economic environment. A period of U.S.
dollar strength has placed further pressure on all commodities, whilst increasing bond yields have increased the
opportunity cost of holding metals and has pushed prices lower. Concerns over Chinese growth and the uncertainty
around Greece's possible exit from the Eurozone were leading factors in the weak price performance. Global
demand for platinum is expected to increase in the second half of 2015 driven by growth in autocatalyst usage and
a slowdown in recycling volumes. In the first half of the year, vehicle sales in Western Europe have exceeded the
corresponding period in 2014 and an increase in loadings due to stricter Euro 6 emissions limits has resulted in a
higher consumption of platinum. Jewellery demand has decreased as the Chinese jewellery market softened further
in the first six months. The slowdown in the Chinese market has been partially offset by the strong expansion of
platinum jewellery market in India. On the supply side, platinum production from South Africa has ramped back up
after the prolonged industrial action that ended in June 2014. A modest deficit in the platinum market is expected in
2015, dependent on the outcome of current risks facing Europe and China.
Palladium
Palladium demand remains primarily in autocatalyst consumption, which has been adversely impacted by the recent
slowdown in auto sales growth in China and drop in gasoline-based emerging markets. Although light duty vehicle
sales in China were up 3.8% through May, the market lost momentum in June with sales down 1.8% year-on-year
whilst North America increased approximately 4% over the same period.The palladium price performed better,
relative to platinum, over the majority of the first half, however in June palladium experienced a notable decline.
This movement was driven largely by a shift in investor sentiment as short positions reached record levels
increasing the downward pressure on prices. The palladium market is expected to see a reduction in the deficit,
after an exceptional year for investment in 2014 following the launch of two South African Exchange Traded Funds
(ETFs).
Rhodium
The rhodium market is expected to move towards a balanced market or small surplus as autocatalyst demand
growth is offset by the return of South African production. Rhodium suffered a pronounced price movement in June
falling over 20% in the month as supply was seen to return to the market through liquidation of stock held by private
investors mainly in the US and Europe.
Autocatalysts
Sustained growth in demand for vehicles in Western Europe resulted in higher vehicle sales in each month of the
first half of 2015 compared to the corresponding months in 2014, extending a run of 22 months of consecutive
growth. In addition platinum usage is likely to increase in 2015 as the loadings on Euro 6 (light duty vehicles)
compliant cars are higher than loadings on Euro 5 compliant cars. Due to the phased implementation of the
legislation, with limits being applied to all new models from September 2014 and which will apply to all new vehicles
from September 2015, the increase in loadings is expected to extend into 2016. Euro 6b is focused on reducing the
NOx emissions from vehicles to improve air quality. Similarly autocatalyst demand in China is expected to rise due
to higher diesel loadings from China IV emissions limits. In other markets, sales are higher in the US and further
production growth in countries such as India and Thailand is expected in 2015 whilst car sales in Japan, Russia,
Argentina and Brazil have declined in the first six months. Heavy duty loadings in Japan have also increased to
meet tightening emissions legislation in export markets, increasing platinum consumption in this sector.
There has been a recent increase in the media coverage of the environmental and health impacts of diesel
emissions, with diesel's reputation being based on historical views of old diesel technology. The coverage of diesel
in the media has been focused in Paris and subsequently London where politicians have announced their intentions
to progressively ban or tax older diesel vehicles, which will likely accelerate the diesel fleet renewal. Diesel engines
continue to fulfil a vital role in meeting emissions standards that address both NOx and CO2 emissions. However
the recent negative press may have the potential to a reduce diesel share in France and the UK in the long term.
We are working with other Platinum producers, autocatalyst manufacturers and automotive companies to ensure
the correct facts are available regarding diesel vehicle emissions.
Industrial
Gross platinum industrial demand is a function of global economic performance and is in line with expectations for
2015, with consumption in the electrical and glass industries expected to increase marginally. Growth in industrial
consumption is typically a combination of metal to replace in-process losses and metal for new plant capacity. Hard
disks are expected to underpin a steady increase in electrical demand, with fibreglass the dominant driver in the
glass sector. Platinum usage in fuel cell applications is expected to double in 2015 off a low base with growth
across all segments, particularly in stationary and road transport fuel cell applications.
Jewellery
The global jewellery market is expected to be lower in 2015 as the decline in China is partially offset by the rise of
the Indian market. China currently accounts for over 60% of global platinum jewellery demand. The Shanghai Gold
Exchange (SGE) volumes for the first half of the year provided indicators of a slowdown in China as the overall
economy, and exports continued to fall, while retail sales remained sluggish. Bridal consumption is expected to
remain strong with continued acceptance of the ‘Platinum pair ring' concept in the lower tier markets. Strong growth
in the Indian platinum jewellery market is expected to be in excess of 20% in 2015, with significant uptake
particularly in men's jewellery purchases partially offsetting the impact of the Chinese market. Further gains are
expected from the success of the Platinum Guild International's Platinum Evara brand launched in December 2014
and the related dual gifting concept. The outlook for platinum jewellery in North America is positive with mature
market growth expected to continue in 2015.
Investment
Demand for PGMs for investment purposes, includes the visible stocks supporting exchange-traded fund (ETF)
products and unmeasured over-the-counter (OTC) metal holdings in vaults. Platinum investment demand via ETF
holdings has recovered towards the end of the first half of the year with the outlook for 2015 expected to hold
steady through a continued low price environment. The World Platinum Investment Council (WPIC), launched in
2014, is focused on stimulating investor interest by creating a more accessible and transparent platinum market.
Marketing strategy
Anglo American Platinum's commercial strategy adds sustainable value by optimising its key commercial value
drivers: contractual terms, risk management, customer portfolio diversity and market development activities. The
company obtains robust market intelligence that informs the underlying drivers of supply, demand and metal-price
projections; as well as market development opportunities.
The last of discounted contracts ended in 2014 and as a result all H1 2015 sales were at or above industry
benchmark prices. Anglo American Platinum showcased the new Hyundai ix35 Fuel Cell Electric Vehicle ahead of
the London Platinum week in May 2015. During Platinum Week there was significant interest in the fuel cell
segment following the launch of both Toyota and Hyundai's vehicles earlier this year. Platinum Guild International
successfully launched the Platinum Evara brand in December 2014, which targets the Indian bridal jewellery
market. The initial response to the brand has been positive and has contributed to the strong growth in the Indian
platinum market in 2015.
Anglo Platinum's marketing team is working with the other platinum producers and fabricators, under the auspices
of the International Platinum Association (IPA) and the European car manufacturers to counter the negative
sentiment towards diesel vehicles in Europe.
VOLUME TO VALUE STRATEGY
Restructuring and repositioning the portfolio
The Company continues to focus on value over volume, and has reduced production by over 350koz from the
consolidation of Rustenburg mines from 5 to 3 mines and Union from 2 to 1 mine. In addition, with continuous
review of all production, Union declines were closed at the end of 2014, reducing production by another 60koz per
annum. Significant headcount reductions have occurred since the beginning of the restructuring in 2013, with c.
11,000 positions having been removed. In addition, the latest phase of restructuring through the removal of nearly
400 managerial positions will ensure further cost savings for the business. The cost saving and revenue
enhancement initiatives of R3.8 billion announced as part of the restructuring have been delivered, and a new wave
of cost reduction at operations and in indirect costs is underway. Anglo American Platinum continues with the
repositioning to create a high quality asset portfolio, with low cost and high margin production, low safety risk and
high mechanisation potential. The assets that do not form part of the retained portfolio are part of the disposal
program.
Capital allocation and discipline
The access to capital and efficient capital allocation remains a strategic risk to the mining industry. The Company
has undergone an extensive exercise with both SIB and Project capital to ensure that any decision to invest in
capital will maximise value for all stakeholders.
SIB capital expenditure has been prioritized according to need and urgency, with budgets reduced in line with
affordability and timing of market demand. Governance and oversight has been increased by the introduction of an
investment committee to oversee the authorisation of all SIB spend, reflecting the approach to capital discipline. In
addition, medium and large stay-in-business projects are reviewed by a specialist internal team to advise on the
correct technical solution, whilst challenging the costs. For example, at Mogalakwena mine, the Blinkwater tailings
disposal facility design was reviewed and quantities required for wall building significantly reduced. Scheduled
maintenance intervals have been challenged with the result that capitalised mid-life interventions have been
deferred, whilst the need for certain spares holdings have been re-assessed in light of current constraints.
A portfolio optimisation process has been conducted to ensure that the most value maximising projects will be the
ones implemented as part of the portfolio design. Each asset underwent a thorough process to assess a number of
alternative business cases (ABC) for each mineral endowment. These ABCs were assessed on a number of
qualitative and quantitative criteria aligned to strategy to create a project ranking list. Using the outcomes, multiple
portfolios were created and stress-tested with a number of constraints including availability of capital, balance sheet
strength, market conditions, demand growth for platinum etc.
The outcome of the process identified key projects and opportunities for repositioning the portfolio, including
Mogalakwena concentrator debottlenecking, Twickenham trackless underground mine, a low capital option for
Amandelbult production replacement and development of Der Brochen in the longer term. Having applied both the
market and financial constraints to the portfolio, the Company has identified that none of the projects require
investment in the current environment. Whilst these assets are high quality, with low cost and high margin, and with
the ability to be in the lower end of the cost curve, current market conditions dictate that these should be delayed for
the short term and re-evaluated in 2017.
Update on the disposal of Union and Rustenburg Mines
In respect of the Rustenburg and Union mines, the Company had indicated that the means of divestment would be
clarified at the half year. Currently both options for divestment - an Initial Public Offering (IPO) or a trade sale - are
still being worked on, and whilst it remains practicable, both options will be kept open. Anglo American Platinum's
focus from the outset has been to identify the right option for the business, stakeholders and shareholders and this
remains the ambition. The Company remains committed to pursuing the strategy of focusing on core assets and
exiting those assets identified as non-core.
Bokoni
Technical work to review the mine extraction strategy and to develop a path towards a sustainable and optimised
operation, in collaboration with our partner, is well advanced. Discussions with our partner to agree the most
appropriate exit for Anglo American Platinum are ongoing and will incorporate the outcomes from the technical
review.
Pandora
The Company continues to assess options to exit its stake in Pandora.
Mining Charter Review
The Mining Charter provided guidelines on the key milestones of mining industry transformation that had to be
achieved between 2004 and 2014. This included a range of transformation pillars on ownership, human resources
development, employment equity, procurement and enterprise development, housing and living conditions, mine
community development, and sustainable development and growth. The beneficiation pillar was suspended pending
finalisation of policy and legislation on beneficiation.
Anglo American Platinum submitted its Mining Charter compliance report ahead of the 14 March 2015 deadline to
the Department of Mineral Resources ("DMR") using the prescribed template. On 14 May 2015, the Minister of
Mineral Resources publicly announced that the DMR had commenced with engagements with individual mining
right holders who have failed to comply with the laws, and the necessary remedial steps are being taken against
these companies. Anglo American Platinum has not received any notification or report from the DMR outlining its
status of compliance or notice of failure to comply, and remains of the view that it has met the requirements of the
Mining Charter.
BOARD AND MANAGEMENT CHANGES
Mr Bongani Nqwababa resigned as Finance Director on 29 September 2014, and left his position on 28 February
2015. We would like to thank Mr. Nqwababa for his time at the Company.
Ms Khanyisile Kweyama resigned from the Anglo American Platinum Board with immediate effect on 29 April 2015.
Ms Kweyama served on the Board since October 2012 and we would like to express our thanks for the input she
provided during her time with the Company.
Mr Ian Botha commenced his role as Finance Director on 1 May 2015, joining the Company from his previous role
as Group Financial Controller at Anglo American plc based in London.
Mr Andile Sangqu was appointed as a non-executive director of the Company with effect from 16 July 2015.
Mr Sangqu will also serve as a member of the Social, Ethics and Transformation Committee.
In addition, the Board would like to announce the following changes to the Remuneration Committee:
Appointment of Ms Dhanasagree Naidoo, an independent non-executive director of the Board, as a member of the
Remuneration Committee with effect from 1 October 2015;
Ms Nombulelo Moholi, independent non-executive director and member of the Committee, will take over from Mr.
Richard Dunne as chairman of the Committee with effect from 1 January 2016; and
Mr Richard Dunne, independent non-executive director, will continue as a member of the Committee with effect
from 1 January 2016.
MINERAL RESERVES AND RESOURCES STATEMENT
There have been no material changes to the mineral resource and reserve estimates as disclosed in the 2014
annual report.
OUTLOOK
In view of the current and expected market conditions, Anglo American Platinum is proactively aligning the business
to manage through the current fiscal environment. Stringent controls have been placed on costs, and the next
phase of restructuring will deliver additional cost savings. Cash conservation remains a key focus, and in light of the
current market conditions, project capital spend will be delayed. Project decisions will be re-evaluated at the end of
2016 taking into account market demand. The Company looks to strengthen the financial position in the interim, to
enable the business to manage through the cycle.
Market outlook
Anglo American Platinum's priority is to ensure that we continue to effectively manage the business at the current
price levels and under the current macro-economic environment. The Company expects the Platinum market to
remain volatile in the short to medium term, impacted by demand fluctuations brought about by an uncertain macro-
economic environment, particularly in China and Europe. Although primary South African production has increased
after the strikes in 2014, output this year is expected to be near 2013 levels. In addition future supply growth
remains capital constrained, both now and into the medium term. In the medium term we expect prices to recover
as the fundamentals gain traction.
End use palladium demand is expected to increase in the second half of 2015 with rising gasoline vehicle
production remaining the primary driver. Industrial demand, dominated by the electrical sector, is expected to
remain relatively flat for the remainder of 2015. Despite the ramp up of production after the prolonged strike in 2014,
the palladium market is expected to remain in modest deficit for the remainder of 2015.
Concerns over the Chinese growth, the uncertainty around Greece's position in the Eurozone and related potential
for contagion through Europe and further US Dollar strength are expected to dominate the macro-economic outlook
for the remainder of the year. These factors could see increased pressure on commodity prices despite the solid
long-term fundamentals.
Operational outlook
Equivalent refined platinum production in H2 2015 will be higher that H1 2015 in line with the Company's normal
seasonal production profile. We estimate that we will produce (both equivalent refined and refined production) and
sell within our guided range of 2.3 - 2.4 million platinum ounces in 2015.
Financial outlook
Cost inflation remains a challenge, with labour, electricity and foreign currency denominated input costs under
continued inflationary pressure. Due to the nature of the escalation of our costs during the second half of the year,
we estimate that cash unit costs will approximate R19,250 to R19,750 per equivalent refined platinum ounce for 2015.
The Company's project portfolio has been aligned to the strategic proposals of the Portfolio Review released in
2013. As such, capital expenditure is set to be conservative, and any unapproved projects will not be committed to
in the current market environment. Therefore capital expenditure will likely reduce to between R4.0 billion to R4.5
billion excluding capitalised waste stripping for 2015. Capitalised waste stripping will be around R1.2 billion for the
year. Project and SIB capital expenditure for 2016 will be within R4.5 billion and R5.0 billion, with capitalised waste
stripping guidance of between R1.0 and R1.5 billion.
The Rand remained weak against the US dollar during the first half of 2015, and our earnings remain highly geared
to the rand / US dollar exchange rate.
Johannesburg, South Africa
16 July 2015
ADMINISTRATION
Executive directors
CI Griffith (Chief executive officer)
I Botha (Finance director)
Independent non-executive directors
MV Moosa (Independent non-executive chairman)
RMW Dunne (British)
NP Mageza
NT Moholi
D Naidoo
AH Sangqu (Appointed 16 July 2015)
JM Vice
Non-executive directors
M Cutifani (Australian)
KT Kweyama (Resigned 29 April 2015)
R Médori (French)
AM O'Neill (Australian)
PG Whitcutt (Alternate director to R Médori)
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
UK PAYING AGENTS
Computershare Investor Services PLC
Bridgwater Road, Bristol, B39979H
United Kingdom
PO Box 82
The Pavilions
Telephone +0870 702 0000
Facsimile +0870 703 6120
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
20 July 2015
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