PGMs production up by 3% in Anglo Q4

Anglo lowers 2019
PGMs production guidance

Platinum and palladium production both increased by 3% to 602,300 ounces and 386,600 ounces respectively, driven by an improved operational performance across the majority of the portfolio says Anglo American reports a 7% increase in total production on a copper equivalent basis for the fourth quarter of 2018, compared to the same period in 2017, excluding the effect of the stoppage at Minas-Rio (1).

Mark Cutifani, Chief Executive of Anglo American, said: "Our continuing focus on efficiency and productivity improvements across the business resulted in another strong quarter, adding to our consistent track record of delivery."

Own mined platinum production decreased by 12% to 307,500 ounces and palladium production decreased by 7% to 234,800 ounces due to the sale of Union mine on 1 February 2018, after which its production was purchased as concentrate. Excluding Union, platinum production from own mine operations decreased by 2% and palladium production remained flat.

Mogalakwena platinum production decreased by 11% to 108,400 ounces and palladium production decreased by 8% to 118,200 ounces due to an 8% reduction in ore grade, as previously guided, as well as maintenance at one crusher, which led to a reduction in tonnes milled.

Amandelbult platinum and palladium production both decreased by 16% to 96,500 ounces and 44,900 ounces, respectively. The decreases were primarily due to the section 54 stoppage following the fatal incident on 18 October 2018 and Eskom power disruptions.

Unki platinum production increased by 34% to 22,000 ounces and palladium production increased by 38% to 19,600 ounces due to a strong operational performance with a 20% increase in tonnes milled 10% improvement in recovery and 3% improvement in built-up head grade.

The acquisition of the remaining 50% of Mototolo was concluded on 1 November 2018, from which date 100% of its production became own mined production, contributing 17,500 platinum ounces and 10,900 palladium ounces.

Joint venture platinum production (Mototolo to 31 October 2018, Modikwa and Kroondal) increased by 6% to 126,200 ounces (of which 63,100 ounces was own mined production and 63,100 ounces was purchased concentrate). Palladium production increased by 6% to 82,400 ounces (of which 41,200 ounces was own mined production and 41,200 ounces was purchased concentrate). This was driven by productivity improvements, improved plant recoveries and an increase in grades.

Purchase of concentrate from joint ventures increased by 6% for platinum and 6% for palladium due to increased production, as outlined above.

Purchase of concentrate from associates decreased by 14% for platinum and 13% for palladium. The sale of Anglo American Platinum's share in Bafokeng-Rasimone Platinum Mine (BRPM) completed on 11 December 2018 and production was treated as third party purchase of concentrate from 1 December 2018.

Purchase of concentrate from third parties increased by 51% for platinum and 46% for palladium due to concentrate purchased from Union mine following its sale, as well as from BRPM material following its sale on 11 December 2018.

Refined platinum production increased by 7% to 770,900 ounces, while palladium production was flat at 493,800 ounces. Q4 2018 includes the partial release of the work-in-progress inventory following scheduled smelter rebuilds and maintenance at both Mortimer smelter and Polokwane smelters earlier in 2018.

Platinum sales volumes (excluding refined metal purchased from third parties) increased by 8% to 776,900 ounces due to higher refined production, supplemented by a draw down in refined platinum stocks. Palladium sales volumes decreased by 4% to 455,300 ounces in Q4, 2018

The full year price per platinum ounce for the basket of metals sold increased by 13% to $2,219/oz compared to 2017, as 17% and 101% price increases in palladium and rhodium respectively more than offset an 8% reduction in the platinum price.

2019 platinum production guidance is revised to 2.0-2.1 million ounces (previously 2.0-2.2 million ounces) and palladium production guidance remains at 1.3-1.4 million ounces, decreases compared to 2018 due to the transition of Sibanye material to a tolling arrangement in place of its purchase as concentrate.

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