OVERVIEW - PRODUCTION

• Commitment to elimination of fatalities – no fatalities occurred in Q1 2020, continuing the record fatal free period at managed operations
• Total PGM production (expressed as 5E+Au metal in concentrate) decreased 7% against prior year (Q1 2019) to 954,800 ounces, largely due to the impact of shutdowns implemented by the Government of the Republic of South Africa (RSA) in response to curbing the outbreak of COVID-19. This led to a loss of 61,000 PGM ounces in the quarter
• Own managed mines PGM production decreased by 7% to 560,100 ounces due to the COVID-19 shutdowns and some impact from Eskom power outages earlier in the quarter
• Joint venture PGM production (mined and purchase of concentrate) decreased by 10% to 188,800 ounces largely due to the COVID-19 shutdowns
• Refined PGM production including tolling decreased by 15% to 743,900 ounces. This was due to the temporary closure of the Anglo Converter Plant (ACP) and the declaration of force majeure to secure a safe operating environment
• PGM sales volumes (excluding tolling and 4E POC sales that are now tolled) decreased 13% to 681,300 ounces due to lower refined production, partially supplemented by a drawdown in refined palladium inventory

OVERVIEW – UPDATE ON RESPONSE TO COVID-19

• Safe shutdowns implemented across all operations, with limited surface operations at Mogalakwena, later extended to limited mining operations at Mogalakwena and the start-up of Polokwane Smelter in April
• ACP Phase B repairs continued throughout the lockdown period, making good progress and on schedule
• Employees continue to be paid during the lockdown including full fixed pay, as well as pension and medical benefits and housing allowances where applicable
• Local host communities continue to be supported through a comprehensive response plan focusing on providing food and water provisions, and training and supply of equipment to clinics and hospitals
• Supporting small business – supplier response plan in place to deliver range of support for suppliers
• Strong financial position – in a net cash position of R11.8 billion at 31 March 2020 (unaudited) with committed facilities of R20.5 billion
• Cash conservation measures identified – cost and capex savings of over R4.0 billion identified for 2020

REVIEW OF THE QUARTER

SAFETY

Anglo American Platinum remains committed to the elimination of fatalities and reports zero fatalities in the period at managed operations. The Company continues its record fatal-free period as a result of the commitment made by every employee to maintaining safety standards. The Total Recordable Case Frequency Rate (“TRCFR”) per million hours at managed operations for the quarter improved 20% to 2.39 compared to 2.97 in the prior period.

PGM PRODUCTION

Total PGM production of 954,800 ounces decreased 7% (against prior period Q1 2019), with platinum production down 7% to 440,900 ounces and palladium production down 7% to 303,100 ounces. The impact of the shutdowns implemented by the Government of the Republic of South Africa (RSA) in response to curbing the outbreak of COVID-19 led to a loss of 61,000 PGM ounces in the quarter. Eskom load-shedding also impacted production, largely at Amandelbult, resulting in a loss of 8,300 PGM ounces.

PGM production from own managed mines

Total PGM production from own managed mines decreased 7% to 560,100 ounces (platinum production decreased by 6% to 257,500 ounces and palladium production decreased 7% to 204,500 ounces), largely due to the COVID-19 shutdowns.

Mogalakwena PGM production decreased 8% to 282,300 ounces (platinum decreased by 7% to 121,900 ounces and palladium production decreased by 9% to 128,700 ounces), primarily due to maintenance on the North concentrator mill which impacted tonnes milled, as well as the impact from COVID-19 shutdowns.

Amandelbult PGM production decreased 13% to 167,700 ounces (platinum and palladium production both decreased by 13%, to 85,500 ounces and 39,100 ounces respectively), due to Eskom load shedding power outages in January and February, as well as the COVID-19 shutdowns.  

Mototolo PGM production increased by 6% to 61,200 ounces (platinum production increased by 5% to 28,300 ounces and palladium increased by 5% to 17,200 ounces), due to higher throughput and grade, despite the impact of COVID-19 shutdowns.

Unki PGM production increased 13% to 49,000 ounces (platinum production increased by 13% to 21,800 ounces and palladium production increased by 15% to 19,600 ounces), due to improved concentrator throughput and recovery supported by mining volume increases.

PGM production from joint ventures (50% own mined production and 50% purchase of concentrate)

Joint venture PGM production, decreased by 10% to 188,800 ounces (platinum production decreased by 11% to 83,800 ounces and palladium production decreased by 9% to 56,800 ounces). This was largely due to the impact of COVID-19 shutdowns.

In addition, due to the temporary closure of the ACP resulting in the declaration of force majeure to purchase of concentrate suppliers, it was agreed that 50% of the concentrate produced by Kroondal (a pool and share agreement) will be sold to, and processed by Sibanye-Stillwater for the duration of the force majeure period. As a result, Sibanye-Stillwater purchased and will market and sell material, equivalent to 12,000 PGM ounces in Q1.

Purchases of PGM concentrate from third parties

Purchase of PGM concentrate (POC) from third parties, decreased by 5% to 205,900 ounces (platinum POC decreased by 3% to 99,600 ounces and palladium POC decreased by 6% to 41,800 ounces), due to the impact of COVID-19 shutdowns, and the agreement that purchase of concentrate from Platinum Mile would be made by Sibanye-Stillwater for the duration of the force majeure period.

Refined PGM production

Refined PGM production, excluding tolling and 4E production now tolled, decreased by 22% to 612,200 ounces (refined platinum production decreased 34% to 240,300 ounces and refined palladium production decreased by 26% to 197,100 ounces). Refined production was largely impacted by the temporary closure of the ACP on 6 March 2020, to repair the Phase B unit, which led to a temporary increase in work-in-progress inventory.

ACP Repair

The ACP was temporarily closed on 6 March 2020 to secure a safe operating environment. Repairs started on Phase B unit, with most of the replacement equipment (i.e. waffle coolers) obtained from the undamaged waffle coolers in the Phase A unit or spares available in inventory. All procurement of additional equipment was from within South Africa, so no supply chain disruptions have been experienced.

The original estimated time for repairs was 80 days, with a completion date of around 25 May 2020. The ACP Phase B repairs were able to continue during the lockdown period in South Africa and are progressing well and on schedule. Repairs will be followed by significant testing to ensure stability and a safe operating environment before re-commissioning of the ACP.

PGM sales volumes

PGM sales volumes, excluding the impact of 4E toll treated material and trading, decreased 13% to 681,300 ounces, with platinum sales volumes down 33% to 239,900 ounces and palladium sales volumes down 14% to 222,500 ounces due to the decrease in refined production, supplemented by a drawdown in refined palladium inventory.

UPDATE ON RESPONSE TO COVID-19

Overview

On 23 March 2020 President Cyril Ramaphosa of the Republic of South Africa declared a national lockdown for 21 days effective from midnight of 26 March 2020. On 9 April 2020, Pres. Ramaphosa extended the lockdown period in South Africa for an additional two-weeks, ending at midnight on 30 April 2020.

On the 28 March 2020, President Emmerson Mnangagwa of Zimbabwe declared a national lockdown for 21 days effective from midnight of the 30 March 2020 until midnight of the 19 April 2020. On 19 April 2020, Pres. Mnangagwa extended the lockdown for an additional two weeks, ending on 3 May 2020.

Anglo American Platinum’s priority remains ensuring the safety and health of our employees and surrounding communities. The Company completed safe shutdown, placing all assets on care and maintenance, which was successfully completed without any incidents by midnight on Thursday 26th March, except for Mogalakwena surface material which was treated through the concentrators on a scaled back basis. Operations which were classified as essential mining operations were safely re-started in April at limited operating capacity, in line with government guidelines.

Download the Anglo American Platinum Limited Production Report for the first quarter ended 31 March 2020