Overview – Q4 2021 performance against prior period Q4 2020
- Safety performance – no work-related fatalities in Q4 2021 at own-managed operations, achieving a fatality-free year at own-managed operations. Non-managed joint-operation Modikwa also achieved a safety record and a fatality-free year.
- Total PGMs production (expressed as 5E+Au metal-in-concentrate) up 3% against Q4 2020 at 1,103,400 ounces.
- Own-managed mines PGMs production of 634,600 ounces increased by 3% in Q4 2021, due to stronger production from Amandelbult and Unki increasing by 15% and 13% respectively.
- Refined PGMs production (owned production, excluding tolling) increased by 107% to 1,391,300 ounces. Strong performance from the processing assets resulting in further reduction of PGMs work-in-progress inventory.
- PGMs sales volumes (from production, excluding sales from trading) increased by 70% to 1,285,200 ounces enabled by the increase in refined production. Sales were slightly lower than refined production to rebuild refined metal inventory.
- Base metals production (copper and nickel) increased 45%, with nickel up 53% to 5,700 tonnes and copper up 34% to 4,000 tonnes due to high base-metal loaded areas mined at Mogalakwena.
Overview – 2021 performance against prior period 2020
- Total PGMs production increased by 13% to 4,298,700 PGMs ounces.
- Total own-managed mines PGMs production increased by 10% to 2,436,700 PGMs ounces.
- Total refined PGMs production (owned production, excluding tolling) increased by 89% to a record 5,138,400 PGMs ounces.
- Total PGMs sales volumes (from production, excluding sales from trading) increased by 82% to 5,214,400 PGMs ounces.
- Base metal production increased by 52%, with nickel production up 61% to 22,300 tonnes and copper production up 41% to 14,600 tonnes.
Natascha Viljoen, CEO of Anglo American Platinum, said:
“Our strong commitment to safe, responsible production resulted in no work-related fatalities at our own-managed operations in the quarter, meaning they were fatality-free for the year as a whole, bringing the total to 471 days fatality-free at year-end. In addition, our joint-operation, Modikwa also achieved a safety record by being fatality-free for the year. Tragically, our non-managed joint operation, Kroondal, recorded two work-related fatalities and we extend our sincerest condolences again to the families and loved ones of Tebogo Motlogelwa and Philasande Wilburforce Xabanisa.
Operating in a Covid-19 environment continues to bring challenges, such as increased levels of absenteeism for recovery from the virus. While this has led to a 13% regression in our Total Recordable Case Frequency Rate, we did see a substantial improvement in December, with the lowest recorded injuries during the year, achieving a rate of 1.53 per million hours worked. Our focus remains on continuing to improve our safety performance across all the operations.
We delivered a strong performance with total PGMs production increasing by 3% in the fourth quarter, and with production for the year increasing by 13% compared to 2020. Amandelbult, Unki and Modikwa operations delivered substantial production increases in the quarter. We continued our strong refined production performance, increasing by 107% in the quarter, owing to the consistent performance of the ACP. Our full year refined production increased 89% compared to 2020, reaching a new record and meaning we largely reduced our work-in-progress inventory levels during the year, ahead of initial forecasts. PGMS sales volumes increased by 70% in the quarter due to the increase in refined production, despite rebuilding refined metal inventories to more normal levels following robust demand earlier in the year. We look forward to improving on our performance in 2022.”
REVIEW OF THE QUARTER
Safety
Anglo American Platinum reported no work-related fatalities during the quarter at its own-managed operations. Own-managed operations have achieved 471 days fatality-free to 31 December 2021. In addition, our non-managed joint-operation, Modikwa, achieved a safety record of one year fatality-free. Tragically, we had two fatalities in October at our non-managed joint-operation, Kroondal. In collaboration with our joint operations’ management teams, we are together strengthening the approach to eliminating fatal risks and will support the transformation safety journeys.
The Total Recordable Case Frequency Rate (TRCFR) per million hours at managed operations over the year regressed by 13% to 2.55 per million hours, compared to 2.25 per million hours in the prior period. Turnaround plans were implemented to address the increase in injuries, which were linked to the consequences of Covid-19 and resulting instability due to causes such as higher absenteeism as employees isolated during recovery. As a result, we saw a substantial improvement in the December TRCFR, improving to 1.53 per million hours worked.
Anglo American Platinum continues its strong efforts to roll out its Covid-19 vaccination programme across the business. As of 31 December 2021, 71% of the workforce had received their first vaccination, and 55% had received their second vaccination. In line with Government protocols, Anglo American Platinum has implemented the roll-out of booster vaccinations for employees.
Metal-in-concentrate (M&C) PGMs production
Total PGMs production
Total PGMS production in Q4 2021 increased 3% compared to the prior period (Q4 2020) to 1,103,400 ounces, with platinum production 3% higher at 511,200 ounces, and a 2% increase in palladium production to 345,200 ounces. The improved performance was due to a 7% increase in concentrator throughput, offset by a 5% lower built-up head grade of 3.49g/t. PGMs production for the full year increased by 13% to 4,298,700 PGMs ounces compared to 2020.
PGMs production from own-managed mines
Total PGMs production in Q4 2021 from own-managed mines increased by 3% to 634,600 ounces (platinum production increased by 3% to 287,800 ounces, while palladium production increased by 1% to 229,100 ounces). The higher production was due to stronger performances at Amandelbult, Unki and Modikwa mines during the quarter. PGMs production for the full year increased by 10% to 2,436,800 PGMs ounces compared to 2020.
Mogalakwena increased its throughput in tonnes milled by 5% during the quarter compared to Q4 2020 but experienced a 7% lower built-up head grade as grades normalised over the year, after mining a particularly high-grade area in Q4 2020. The grade for the quarter ended at 3.22g/t compared to 3.46g/t in the prior period. As a result of the lower grade, PGMs production decreased by 2% to 300,800 ounces (platinum decreased by 3% to 126,200 ounces and palladium production decreased by 3% to 138,100 ounces). Overall, PGMs production for the year increased by 3% to 1,214,600 PGMs ounces compared to 2020.
Amandelbult delivered a strong performance, with PGMs production increasing by 15% to 213,600 ounces (platinum production increased by 15% to 107,700 ounces and palladium production increased by 13% to 49,900 ounces). Concentrator throughput increased by 20% due to improved mining performance and greater plant stability compared to the prior period. PGMs production for 2021 increased by 27% to 773,200 PGMs ounces compared to 2020.
Mototolo PGMs production decreased by 18% to 56,900 ounces (platinum production decreased by 19% to 25,900 ounces and palladium decreased by 20% to 16,200 ounces). The decrease was due to lower grade material due to dilution from poor geological conditions, and the impact of regional community unrest which affected mine access and, production for five days. To mitigate these headwinds, lower-grade ore stockpiles were utilised to supplement mined production. PGMs production for 2021 increased by 9% to 244,400 PGMs ounces compared to 2020.
Unki PGMs production increased by 13% to 63,300 ounces (platinum production increased by 14% to 28,000 ounces and palladium production increased by 13% to 24,900 ounces), owing to the completion of the concentrator debottlenecking project. The debottlenecking project should see monthly tonnes milled increase from c.175k tonnes per month to c.210k tonnes per month, leading to a ~50,000 PGMs ounces increase per annum. PGMs production for 2021 increased by 4% to 204,600 PGMs ounces compared to 2020.
PGMs production from joint operations (50% own-mined production and 50% purchase of concentrate)
PGMs production from joint operations increased by 1% to 199,400 ounces (platinum production decreased by 1% to 89,400 ounces while palladium production increased by 5% to 59,000 ounces). PGMs production for 2021 increased 24% to 843,000 PGMs ounces compared to 2020.
Kroondal PGMs production decreased by 14% to 126,800 ounces (platinum production decreased by 14% to 60,600 ounces and palladium production decreased by 16% to 31,600 ounces). The decrease is mainly due to difficult mining ground conditions, the planned ramp-down of Simunye shaft as it comes to the end of life of mine, as well as safety stoppages of the underground operations following two fatalities in October.
Modikwa PGMs production increased by 46% to 72,800 ounces (platinum production increased by 47% to 28,600 ounces and palladium production increased 48% to 27,400 ounces) due to significant improvements in mining and safety performance.
Purchases of PGMs concentrate from third parties
Purchase of PGMs concentrate (POC) from third parties increased by 4% to 269,400 ounces (platinum and palladium POC increased by 5% to 134,100 ounces and to 57,100 ounces respectively) as a result of the year-on-year recovery from Covid-19.
Refined PGMs production
Refined PGMs production (from owned production, excluding tolling) increased by 107% to 1,391,300 ounces. Refined platinum production increased by 120% to 653,500 ounces and refined palladium production rose by 105% to 423,200 ounces. The strong performance reflected the operational stability in the ACP, following the completion of the Phase A rebuild in November 2020, and strong performance across all processing assets. The build-up in work-in-progress inventory following the temporary closure of the ACP has largely been processed and refined. The ACP Phase B rebuild has been completed in January 2022 and recommissioning will commence in Q1 2022. Total refined PGMs production (from own production, excluding tolling) for 2021 increased by 89% to a record 5,138,400 PGMs ounces compared to 2020.
Toll refined PGMs production increased by 22% to 179,500 PGMs ounces.
PGMs sales volumes
PGMs sales volumes (excluding trading) increased by 70% to 1,285,200 ounces, because of higher refined production, partially offset by the rebuild in refined metal inventory following strong demand and a draw down in the first half of 2021. Platinum sales volumes increased by 103% to 632,900 ounces and palladium sales volumes increased by 53% to 395,100 ounces.
PGMs sales volumes from trading decreased 26% to 272,800 ounces, as trading activity normalised. Sales from trading activities were abnormally high in Q4 2020 to maintain the supply of metal to customers, following the impact of Covid-19 on production and the temporary closure of the ACP.
The Q4 2021 average realised basket price of $2,434 per PGMs ounce reflects continued strong prices, despite being down 3% on Q4 2020 and 14% down on Q3 2021 as prices for most PGMs softened over the last quarter.
2022 Guidance
Production guidance (metal in concentrate) for 2022 is 4.1-4.5 million ounces(1). Refined production guidance for 2022 is 4.2-4.6 million ounces, subject to the potential impact of Eskom load-shedding. Both are subject to the extent of further Covid-19 related disruption. Unit cost guidance for 2022is expected to be between R13,800 – R14,500 per PGMs ounce (equivalent to c.$900 per PGMs ounce).
(1) Metal in concentrate production is expected to be 1.9–2.1 million ounces of platinum, 1.3-1.4 million ounces of palladium and 0.9–1.0 million ounces of other PGMs and gold.
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Sponsor:
Merrill Lynch South Africa (Pty) Ltd t/a BofA Securities