OVERVIEW

• Commitment to elimination of fatalities – no fatalities occurred in Q3 2018
• Total PGM production (expressed as 5E+Au metal in concentrate) of 1,345,700 ounces increased 3%, including platinum production of 649,000 ounces and palladium production of 410,800 ounces, due to improved operational performances across the majority of the portfolio, despite the removal of unprofitable ounces from Bokoni, which was placed on care and maintenance in Q3 2017
• Own mined PGM production increased 2% to 567,600 ounces due to strong performances from Unki and Amandelbult
• Joint venture PGM production (mined and purchase of concentrate) increased 12% to 314,400 ounces due to a strong performance from Mototolo and Kroondal
• Purchase of PGM concentrate from associates was down 16% to 113,600 ounces primarily due to the closure of unprofitable production from Bokoni in Q3 2017
• Purchase of PGM concentrate from third parties increased by 39% to 350,100 ounces due to production purchased from Union mine following its sale
• Refined PGM production decreased by 21% to 1,079,600 ounces, due to a planned partial furnace rebuild at Polokwane smelter in Q3 2018 which led to an increase in work-in-progress inventory. Commissioning of the Unki smelter commenced in Q3 and is progressing well
• PGM sales volumes decreased 16% to 1,208,900 ounces due to the increase in work-in-progress inventory, as a result of the partial furnace rebuild in Q3 2018

REVIEW OF THE QUARTER

SAFETY

Anglo American Platinum remains committed to the elimination of fatalities, and reports zero fatalities in the period. The Total Recordable Case Frequency Rate (“TRCFR”) per million hours at managed operations for the quarter improved significantly to 2.93 compared to 4.67 in Q3 2017, equating to a 37% improvement.

PGM PRODUCTION

Total PGM production was up 3% as improved operational performances across the majority of the portfolio offset unprofitable production from Bokoni which was place on care and maintenance in Q3 2017 (up 6% if Bokoni is excluded from the prior period). Platinum production increased 4% to 649,000 ounces and palladium production increased 1% to 410,800 ounces.

PGM production from own-managed mines

Own-managed mines PGM production increased by 2% to 567,600 ounces due to strong performances from Unki and Amandelbult. Platinum production increased by 3% to 262,300 ounces and palladium production increased by 1% to 204,100 ounces.

Mogalakwena PGM production decreased by 2% to 271,800 ounces, due to planned maintenance at the concentrators which led to lower concentrator throughput and lower recoveries, partially offset by higher built-up head grade. Platinum production decreased by 2% to 113,900 ounces and palladium production decreased by 2% to 127,100 ounces as expected. In line with previous guidance, Mogalakwena has experienced a decline in grade, and it is expected that this lower grade will continue for the final quarter.

Amandelbult PGM production increased by 5% to 245,400 ounces, driven by continued operational improvement that was supported by increased development at Dishaba as mining activities transition to this section. Platinum production increased by 5% to 126,000 ounces and palladium production increased by 4% to 57,300 ounces.

Unki PGM production increased by 14% to 50,400 ounces as a result of an increase in tonnes milled, improvements in recovery and increased built-up head grade. Platinum production increased by 13% to 22,400 ounces and palladium production increased by 15% to 19,700 ounces.

PGM production from joint ventures (own mined production and purchase of concentrate)

Joint venture PGM production (Mototolo, Modikwa, Kroondal) increased by 12% to 314,400 ounces (of which 157,200 ounces is own-mined production and 157,200 ounces is purchase of concentrate). Platinum production increased by 14% to 141,200 ounces (of which 70,600 ounces is own-mined production and 70,600 ounces is purchased concentrate). Palladium production increased by 9% to 92,200 ounces (of which 46,100 ounces is own-mined production and 46,100 ounces is purchased concentrate). Mototolo PGM production was up 126% largely due to lower production in Q3 2017 as the concentrator was temporarily stopped to carry out remedial work on the Helena Tailings facility. Kroondal PGM production increased 3% due to increased production efficiencies and plant throughput. Modikwa PGM production decreased 10% due to equipment unavailability and maintenance of equipment underground.

Purchases of PGM concentrate from associates

Purchase of PGM concentrate from associates decreased by 16% to 113,600 ounces, due to the closure of Bokoni which was placed onto care and maintenance in Q3 2017. Purchase of concentrate from associates decreased by 9% for platinum to 66,700 ounces and 25% for palladium to 27,200 ounces. BRPM PGM production increased 14% to 113,600 ounces. Following the sale of Anglo American Platinum’s stake in BRPM, production purchased will be categorised as third-party purchase of concentrate from completion of the transaction in Q4 2018.

Purchases of PGM concentrate from third parties

Purchase of PGM concentrate from third parties increased by 39% to 350,100 ounces due to production purchased from Union mine following its sale. Purchase of concentrate from third parties increased 40% to 178,800 ounces for platinum and 31% to 87,300 ounces for palladium.

Refined production and sales volumes

Refined PGM production decreased 21% to 1,079,600 ounces. Refined platinum production decreased 19% to 556,200 ounces and refined palladium production decreased by 29% to 321,500 ounces. Refined production was impacted by the planned partial furnace rebuild at Polokwane smelter during August and September 2018. The partial rebuild was completed successfully, and the furnace has been recommissioned and returned to full operating capacity. Commissioning of the Unki Smelter is progressing well, and the first matte was tapped from the new smelter on 21 September 2018. Ramp-up of the facility to full production is continuing.

PGM sales volumes, excluding refined metals purchased from third parties as part of our trading activities, decreased 16% to 1,208,900 ounces. Platinum sales volumes decreased by 20% to 530,100 ounces while palladium sales volumes decreased by 30% to 324,300 ounces. Refined PGM sales volumes were supplemented by a draw down in refined inventory.

Full year guidance

Due to strong operational performance across the portfolio, 2018 full year PGM production (metal in concentrate) has been revised up to between 5.1 to 5.2 million PGM ounces (previous guidance of 4.85 to 5.1 million PGM ounces). This includes a revised platinum production guidance of 2.45 to 2.5 million ounces (previous guidance of 2.4 to 2.45 million ounces) and a revised palladium production guidance of 1.55 to 1.60 million ounces (previous guidance of 1.5 to 1.6 million ounces).

Mogalakwena production has been strong to Q3 2018 in part due to a high-grade area mined, largely in H1 2018. This will normalise to an annual average of around 3.18g/t. However, due to strong operational performance, PGM production guidance of 1.15 million ounces will include an upgrade to platinum production guidance of around 490,000 platinum ounces (previously 480,000 platinum ounces).

As a result of scheduled smelter rebuilds and maintenance at both Mortimer smelter and Polokwane smelter, there has been an increase in work-in-progress inventory, of around 460,000 PGMs including 270,000 platinum ounces and 160,000 palladium ounces as at the end of the third quarter (relative to normalised levels of inventory). The built-up work-in-progress inventory will not be refined in full by year end, and therefore refined production guidance is lower than produced production. Full year refined PGM production will be at the lower end of guidance of 4.85 to 5.1 million PGM ounces, including platinum refined production of between 2.4 and 2.45 million ounces and palladium refined production between 1.5 and 1.6 million ounces. The remaining built-up work-in-progress PGM inventory will be processed in H1 2019, which will return to normalised levels.

PGM sales volume guidance for 2018 has been revised up to between 5.2 and 5.3 million ounces (previous guidance of 4.85 to 5.1 million ounces), as a draw down in refined inventory has supplemented sales volumes. Platinum sales volume guidance will remain between 2.4 and 2.45 million ounces and palladium sales volume guidance will be at the lower end of guidance of between 1.5 and 1.6 million ounces.

Download the Anglo American Platinum Limited Production Report for the third quarter ended 30 September 2018