Anglo American Platinum Limited
PGMs Production Report for the fourth quarter ending 31 December 2022
Overview – Q4 2022 performance against prior period Q4 2021
- Safety performance – continued focus on the elimination of fatalities and safety. No fatalities were recorded at own-managed operations and Joint Operations. A zero harm focus resulted in the lowest recorded injury rate.
- Total PGMs production(expressed as 5E+Au metal-in-concentrate) decreased by 10% to 990,400 ounces.
- Own-managed mines PGMs production decreased by 12% to 557,600 ounces due to lower grades from Mogalakwena and Unki, and infrastructure closures at Amandelbult, partially offset by a strong performance at Mototolo.
- Refined PGMs production (owned production, excluding tolling) decreased by 37% to 877,200 ounces as a result of the delayed Polokwane smelter rebuild, due to the delivery of sub-standard materials for furnace construction. The rebuild was completed at the end of Q4 2022, and by the end of January 2023 the ramp-up was largely completed.
- Build-up of work-in-progress inventory at year-end was a net increase of c.100,000 PGM ounces, due to the delay to the Polokwane smelter rebuild, as well as Eskom load-shedding (scheduled power outages), partially offset by strong performance from Waterval and Mortimer smelters.
- PGMs sales volumes (from production, excluding sales from trading) decreased by 31% to 883,400 ounces in line with lower refined production.
- Guidance for 2023(unchanged)– Metal-in-concentrate PGM production guidance is 3.6 - 4.0 million ounces. Refined production guidance for 2023 is 3.6-4.0 million ounces. Unit cost guidance per PGM ounce produced is R16,800 - R17,800.
Natascha Viljoen, CEO of Anglo American Platinum, said:
“Our commitment to eliminating fatalities from our workplaces and achieving zero harm continues to help us keep our people safe. We had no work-related fatalities at our own-managed operations in the period. In addition, continued collaborative efforts with employees, unions, contractors, and other partners have resulted in a material improvement in our total recordable case injury frequency rate (TRCFR), which decreased by 12% to 2.25 per million hours worked. We remain steadfastly focused on ensuring continuous improvement in safety.
Total PGM production was 10% lower compared to the prior period as we continued to see lower grades at Mogalakwena. The closure of infrastructure at Amandelbult that came to the end of its life, and maintenance at the Unki concentrator, as well as lower grade and recoveries at Unki also contributed to lower production. This, however, was partially offset by a strong performance from Mototolo, which saw improved ground conditions, leading to an increase in grade. Further stability at the Mototolo plant following the successful concentrator debottlenecking project also led to improved recoveries and production.
Refined production of 877,200 PGM ounces was largely impacted due to the delay in the Polokwane smelter rebuild, lower mined production and the impact of Eskom load-shedding. However, this was partially mitigated by strong utilisation and throughput from our other smelters. The Polokwane smelter rebuild was completed in December 2022, and we have largely completed the ramp-up. Sales volumes of 883,400 PGM ounces were in line with refined production.
The impact of the delay to the Polokwane smelter rebuild, as well as Eskom load-shedding, net of inventory release and strong performance from Waterval and Mortimer smelters during the year, resulted in a year-end build-up in work-in-progress inventory of c.100,000 PGM ounces. We remain on track to achieve our 2023 guidance, with a strong focus on operational excellence and cost discipline in the coming year.”
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 2.25 per million hours was the lowest recorded injury rate, improving by 12% compared to the prior period of 2.55 per million hours. Significant management efforts are focusing 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. Through implementing technology in conventional underground operations, including blast-on-mesh and winch-scraper proximity detection, high risk incidents have reduced.
Metal-in-concentrate (M&C) PGM production
Total PGM production
Total PGM production in Q4 2022 decreased 10% against the prior period (Q4 2021) to 990,400 ounces, with platinum production decreasing 10% to 458,500 ounces, and palladium production decreasing by 11% to 307,500 ounces.
PGM production from own-managed mines
Total PGM production from own-managed mines decreased by 12% to 557,600 ounces (platinum production decreased by 12% to 253,600 ounces, while palladium production decreased by 13% to 200,300 ounces), primarily due to lower production from Mogalakwena, Amandelbult and Unki, partially offset by strong production from Mototolo.
PGM production at Mogalakwena decreased by 15% to 256,700 ounces (platinum decreased by 15% to 107,500 and palladium production decreased by 14%, to 118,600 ounces), largely due to a 19% reduction in 4E built-up head grade to 2.62g/t from 3.22g/t in Q4 2021. The decline in the grade is a factor of mining in lower grade areas, as well as lower than anticipated grade mined in some areas. Since late 2021, there has been an extensive drilling program together with improved geological modelling, that was concluded at the end of 2022. This has translated into changes in the near-term ounce profile. This short-term change is not expected to affect the overall Mineral Resource estimation.
PGM production from Amandelbult decreased by 17% to 176,600 ounces (platinum production decreased by 17% to 89,600 ounces and palladium production decreased by 18% to 40,800 ounces), mainly due to the closure of Tumela Upper conventional infrastructures, the closure of current open-pit operations, as well as poor ground conditions at Dishaba. The Merensky concentrator was closed in Q4 2022, and greater efficiency benefits will be achieved through utilising the lower cost UG1 and UG2 concentrators at Amandelbult.
Mototolo PGM production increased by 26% to 71,700 ounces (platinum production increased by 27% to 32,800 ounces and palladium increased by 27% to 20,600 ounces), largely due to increased throughput supported by a 7% increase in 4E built-up head grade to 3.22g/t, due to grade improvement initiatives and increased recoveries at the concentrator following increased stability of the concentrator debottlenecking project.
Unki PGM production decreased by 17% to 52,600 ounces (platinum production decreased by 15% to 23,700 ounces and palladium production decreased by 18% to 20,300 ounces). Unki was impacted by maintenance at the concentrator, as well as lower grade and recovery.
PGM production from Joint Operations (50% own-mined production and 50% purchase of concentrate)
Total PGM production from Joint Operations was broadly in line compared to Q4 2021 at 198,000 ounces (platinum production of 90,600 ounces and palladium production of 58,400 ounces).
Total Modikwa PGM production decreased by 2% to 71,600 ounces (platinum production was flat at 28,800 ounces and palladium production decreased 3% to 26,800 ounces). While tonnes milled increased by 9%, 4E built-up head grade decreased by 6% as higher proportions of lower grade Merensky ore and surface material were milled.
Total Kroondal PGM production was flat at 126,400 ounces (platinum production increased by 2% to 61,800 ounces and palladium production decreased by 1% to 31,600 ounces) despite the gradual ramp-down at Simunye shaft, which benefited the prior period, and geologically challenging ground across the complex, which was offset by open pit mining which commenced during 2022.
Purchases of PGM concentrate from third parties
Purchases of PGM concentrate (POC) from third parties decreased by 13% to 234,800 ounces (platinum POC decreased by 15% to 114,300 ounces and palladium POC decreased by 14% to 49,000 ounces), due to lower receipts from third parties.
Refined PGM production
Refined PGM production (from owned production, excluding tolling) decreased by 37% to 877,200 ounces, mainly due to the rebuild of Polokwane smelter, which had been delayed in October 2022 due to the delivery of sub-standard materials, lower M&C receipts, as well as the prior period being higher than normal as built-up inventory from the ACP rebuild was processed. Refined platinum production decreased by 40% to 391,200 ounces and refined palladium production decreased by 34% to 278,500 ounces. The reduction in refined production was partially mitigated by strong utilisation and throughput from our other smelters, Waterval and Mortimer, helping to release some of the built-up inventory. The Polokwane smelter rebuild was completed in December 2022, with ramp-up largely completed in January.
The impact of the delay to the Polokwane smelter rebuild, as well as Eskom load-shedding, net of inventory release and strong performance from Waterval and Mortimer smelters during the year, resulted in a year-end build-up in work-in-progress inventory of c.100,000 PGM ounces.
Toll-refined PGM production decreased by 4% to 173,100 PGM ounces.
Base metal production
Nickel production decreased by 16% to 4,800 tonnes and copper production decreased by 5% to 3,800 tonnes.
PGM sales volumes
PGM sales volumes (excluding trading) decreased by 31% to 883,400 ounces, in line with lower refined production. Platinum sales volumes decreased by 40% to 382,100 ounces and palladium sales volumes decreased by 29% to 282,200 ounces. The average Q4 2022 realised basket price of $2,293/PGM ounce was lower than Q4 2021 due to lower rhodium, iridium, and ruthenium prices.
2023 Guidance (unchanged)
Metal-in-concentrate (M&C) PGM guidance for 2023 is 3.6 - 4.0 million PGM ounces(1). Refined PGM production guidance is 3.6 - 4.0 million PGM ounces, subject to the impact of Eskom load-shedding. Unit cost guidance for 2023 is R16,800 - R17,800 per PGM ounce.
(1)Metal in concentrate production is expected to be 1.65 – 1.85 million ounces of platinum, 1.15 – 1.25 million ounces of palladium, and 0.8 – 0.9 million ounces of other PGMs and gold.
View full PDF of this press release (471KB, opens in a new window)
View Q4 2022 production tables (29KB, opens in a new window)
Sponsor:
Merrill Lynch South Africa (Pty) Ltd t/a BofA Securities