Overview – Q3 2022 performance against prior period Q3 2021

• Safety performance – continued focus on elimination of fatalities and safety. No fatalities at own-managed operations and Joint Operations.
• Total PGMs production (expressed as 5E+Au metal-in-concentrate) decreased by 6% to 1,046,100 ounces.
• Own-managed mines PGMs production decreased by 3% to 587,200 ounces due to Eskom power outages (load-shedding), Amandelbult infrastructure closures and lower grade at Mogalakwena, partially offset by strong production performances from Unki up 41%, and Mototolo, up 9%, following the completion of the concentrator debottlenecking projects in 2021.
• Refined PGMs production (owned production, excluding tolling) decreased by 30% to 994,800 ounces due to the Polokwane smelter rebuild, its first full rebuild in twelve years, which is on track for completion towards the end of Q4 2022.
• Eskom power-outages impacted both concentrators and smelters in the period, which led to a loss of production, as well as an increase in built-up work-in-progress inventory of 40,400 PGM ounces.
• PGMs sales volumes (from production, excluding sales from trading) decreased by 31% to 933,500 ounces in line with lower refined production.
• Guidance for 2022 - Metal-in-concentrate PGM production is unchanged at 3.9 - 4.3 million ounces. Refined production guidance for 2022 is unchanged at 3.7-3.9 million ounces. Unit cost per PGM ounce produced is maintained at R14,000 - R15,000. Guidance is subject to ongoing Eskom power disruptions.

Natascha Viljoen, CEO of Anglo American Platinum, said:

“Our commitment to eliminate fatalities from our workplace continues to help us keep our people safe. We had no work-related fatalities at our own-managed operations in the period. Despite this progress, and our extensive work across all operations to protect the safety of our colleagues, we saw our total recordable case injury frequency rate (TRCFR) increase by 4% to 2.35 per million hours worked.  The focus on reversing this trend is the focus of every leader in this organisation.  

Total PGM production was 6% lower compared to the prior period, but in line with Q2 2022.  We embedded stability at Unki and Mototolo, following their successful completion of the concentrator debottlenecking projects, which saw Unki increasing production by 41% and Mototolo by 9%. We also increased tonnes milled at Mogalakwena, however this was more than offset by a 7% reduction in grade. This grade reduction was due to a delay in accessing the higher-grade South pits from Q3 to Q4, and we have been mining these higher grade areas since September. Amandelbult production was down 12%, largely due to the infrastructure closures at Tumela Upper at the end of 2021, and Eskom power outages.

Refined production of 994,800 PGM ounces was lower as expected, due to the planned rebuild of the Polokwane smelter, its first full rebuild in twelve years to ensure asset reliability over the long term. Sales volumes of 933,500 declined in line with refined production. Sales volumes for the quarter were planned to be lower than refined production, as part of our risk mitigation plans during the Polokwane smelter rebuild.

Eskom power outages have affected both concentrators and smelters, resulting in a loss in production, as well as a build-up in work-in-progress inventory of 40,400 PGM ounces. We maintain our guidance for 2022 and are carefully monitoring the continued impact of power outages on our operations as we progress through Q4.”

Review of the quarter

Safety

We had no work-related fatalities during the period at own-managed operations or Joint Operations. The Total Recordable Case Frequency Rate (TRCFR) per million hours at managed operations of 2.35 per million hours deteriorated by 4% compared to the prior period of 2.26 per million hours. Significant management efforts are focused on contractor safety, working collaboratively with our Joint Operations on safety, incorporating learnings to stop repeat incidents and increased management oversight on high-risk work.

Metal-in-concentrate (M&C) PGM production

Total PGM production

Total PGM production in Q3 2022 decreased 6% against the prior period (Q3 2021) to 1,046,100 ounces, with platinum production decreasing 8% to 478,900 ounces, and palladium production decreasing by 5% to 323,800 ounces. Total PGM production increased by 1% against Q2 2022.

PGM production from own-managed mines

Total PGM production from own-managed mines decreased by 3% to 587,200 ounces (platinum production decreased by 4% to 265,400 ounces, while palladium production decreased by 2% to 211,500 ounces) primarily due to Eskom power outages, lower production from Amandelbult due to infrastructure closures and lower grade at Mogalakwena, partially offset by strong production from Unki and Mototolo.

PGM production at Mogalakwena decreased by 6% to 259,300 ounces (platinum decreased by 8% to 107,600 and palladium production decreased by 5%, to 121,400 ounces). Tonnes milled increased by 2%, as the North concentrator maintenance continued into Q3 2022, resulting in the planned South concentrator maintenance being postponed to Q3 2023. This was offset by a 7% reduction in 4E built-up head grade to 2.84g/t from 3.05g/t, due to a delay in accessing the higher-grade South pits due to community protests.

PGM production from Amandelbult decreased by 12% to 192,600 ounces (platinum production decreased by 12% to 96,500 ounces and palladium production decreased by 13% to 44,800 ounces), largely due to the closure of Tumela Upper conventional infrastructures that reached end of life in December 2021 (contributing c.21,000 PGM ounces in the prior period), as well as the impact from Eskom power outages.

Mototolo PGM production increased by 9% to 75,400 ounces (platinum production increased by 7% to 34,500 ounces and palladium increased by 10% to 22,000 ounces), largely due to an improvement in ground conditions which resulted in a 5% increase in 4E built-up head grade to 3.39g/t, as well as increased stability following the ramp-up of the concentrator debottlenecking project.

Unki PGM production increased by 41% to 59,900 ounces (platinum production increased by 41% to 26,800 ounces and palladium production increased by 40% to 23,300 ounces). The concentrator debottlenecking project was completed in Q4 2021, increasing concentrator capacity from 180ktpm to 210ktpm. This led to a 39% increase in tonnes milled.

PGM production from Joint Operations (50% own-mined production and 50% purchase of concentrate)

Total PGM production from Joint Operations decreased by 16% to 192,000 ounces (platinum production decreased by 15% to 86,800 ounces while palladium production decreased by 16% to 57,200 ounces).

Total Modikwa PGM production decreased by 6% to 75,200 ounces (platinum production decreased by 4% to 30,000 ounces and palladium production decreased 6% to 28,200 ounces). Despite tonnes milled increasing by 5%, 4E built-up head grade decreased by 6% as higher proportions of Merensky ore and surface material, which have a lower grade, were milled.

Total Kroondal PGM production decreased by 21% to 116,800 ounces (platinum production decreased by 19% to 57,000 ounces and palladium production decreased by 23% to 29,000 ounces) largely due to the gradual ramp-down at Simunye shaft, which benefited the prior period by c.16,500 PGM ounces (with forecast for shutdown towards Q4 2022), geologically challenging ground at Bambanani and Kwezi shafts, as well as Eskom power outages.

Purchases of PGM concentrate from third parties

Purchases of PGM concentrate (POC) from third parties decreased by 6% to 266,900 ounces (platinum POC decreased by 9% to 126,700 ounces and palladium POC decreased by 6% to 55,200 ounces) due to lower receipts.

Base metal production

Nickel production decreased by 3% to 5,748 tonnes and copper production increased by 6% to 3,866 tonnes.

Refined PGM production

Refined PGM production (from owned production, excluding tolling) decreased by 30% to 994,800 ounces, due to the rebuild of the Polokwane smelter, undergoing its first full rebuild in twelve years, to ensure asset reliability. Refined platinum production decreased by 31% to 457,200 ounces and refined palladium production decreased by 31% to 317,100 ounces. Start-up is expected to commence in December 2022. In addition, Eskom power outages impacted both concentrators and smelters in the period, which led to build-up in work-in-progress inventory in the quarter of 40,400 PGM ounces.

Toll refined PGM production decreased by 8% to 151,300 PGM ounces.

PGM sales volumes

PGM sales volumes (excluding trading) decreased by 31% to 933,500 ounces, in line with lower refined production. Platinum sales volumes decreased by 35% to 414,600 ounces and palladium sales volumes decreased by 35% to 302,000 ounces. The average Q3 2022 realised basket price of $2,531/PGM ounce was lower than Q3 2021 due to lower prices.

2022 Guidance

We maintain our metal-in-concentrate (M&C) PGM guidance at 3.9 - 4.3 million PGM ounces⁽¹⁾ and our refined PGM production guidance at 3.7 - 3.9 million PGM ounces, subject to the further impact of Eskom power outages. Both are subject to the extent of further Covid-19 related disruption. Unit cost guidance of R14,000 - R15,000 per PGM ounce, is maintained, but note persistent inflationary pressures on consumables.

^{1. Metal in concentrate production is expected to be 1.8 – 2.0 million ounces of platinum, 1.2 – 1.3 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