PGMs production up, sales tumbled!

Production grew by 5% & Sales volume

Falls by 3% YoY at Anglo American

Anglo American Platinum announces another strong financial and operational performance for the 12 months for the year 2018. Commenting on the results, Anglo American Platinum CEO Chris Griffith said, “The fact that two of our colleagues died at work in 2018 is deeply tragic and felt by every one of us. Notwithstanding the significant improvement in the number of fatalities and injury rates, these tragic deaths have heightened our resolve and efforts to eliminate fatalities.

“Operationally and financially, we had a very strong year. Record production performances from Mogalakwena, Unki and Kroondal saw total platinum group metal (PGM) production increasing by 4%. We increased our free cash flow by 60% and reduced net debt by R4.7 billion turning to a net cash position of R2.9bn at the end of 2018.

I am pleased to report that, given this performance and the improving market outlook for PGMs, Anglo American Platinum was the best-performing share on the JSE All Share Index in 2018 delivering a total shareholder return of 55%. Whilst the platinum price remained subdued, the price of our basket of metals increased by 13%, with our diversified PGM proposition delivering significant value for shareholders.”

There were two work-related fatalities in 2018, both at the Amandelbult mine. Anglo American Platinum expresses its deepest condolences to the family, friends and colleagues of Mr Johannes Maimela and Mr Emmanuel Segale. These fatal incidents are especially disappointing against the backdrop of our other improved safety indicators.

The Company’s total recordable case injury-frequency rate (TRCFR) improved by 34%, and the lost-time injury-frequency rate (LTIFR) improved by 42%. The management team’s approach to safety is guided by a revised safety, health and environmental strategy which was co-created between management, unions and employees in 2017, Anglo American Platinum will continue to work to improve its safety performance to achieve zero harm.

Anglo American Platinum further upgraded its portfolio in 2018 and advance delivery on the next phase of value creation. During the year, the disposals of Union Mine, the equity holding in Royal Bafokeng Platinum, and the 33% interest in BRPM were concluded. At the same time, the Company completed the acquisition of Glencore’s and Kagiso Platinum Venture’s stakes in the Mototolo JV, making it a wholly owned operation.

Furthermore, in support of the objective of growing demand for PGMs, the launch of AP Ventures was concluded, committing US$200 million together with the Public Investment Corporation. Anglo American Platinum continues to advance project studies to evaluate the optimal expansion plan at Mogalakwena and assess the potential synergies at Mototolo and Der Brochen.

Mogalakwena had another record production year of 1,170,000 PGM ounces, up 7%. Total PGM production at Amandelbult increased by 1% to 868,800 ounces, due to increased underground production delivered to the concentrator, primarily from Dishaba. Unki mine in Zimbabwe remains a strategic asset and had a record performance in 2018, producing 192,800 PGM ounces, an increase of 16%.

Mototolo had an improved performance in 2018 increasing production by 56% to 287,700 PGM ounces, which include some production overflow from 2017 toll concentrated at Bokoni. Total production from joint venture mines, on a like for like basis, increased 5% to 477,000 PGM ounces, and purchase of concentrate ounces were up 13% to 2,291,900 PGM ounces.

Refined production was; however, lower than mined production due to the temporary build-up of work-in-progress inventory. The planned rebuilds of Mortimer smelter in Q2, and Polokwane smelter in Q3, the commissioning of the Unki smelter in Q3 and other maintenance on processing assets resulted in the inventory build, which the Company expects will be fully processed in 2019.

Sales volumes of 5,224,900 PGM ounces were 3% down on last year’s owing to the lower refined production, which was partially offset by a draw down in refined inventory.