Overview – Q2 2023 performance against prior period Q2 2022
- Safety performance – No fatalities at own-managed operations and Joint Operations. A 46% improvement in the Total Recordable Case Frequency Rate (TRCFR) at managed operations to 1.40 per million hours.
- Total PGMs production (expressed as 5E+Au metal-in-concentrate) decreased by 9% to 943,100 ounces.
- Own-managed mines PGMs production decreased by 10% to 526,700 ounces mainly due to Amandelbult short term operational challenges which has since been mitigated and 2022 planned infrastructure closures, expected grades from Mogalakwena and the impact of Eskom load-curtailment.
- Refined PGMs production (owned production, excluding tolling) decreased by 13% to 1,073,800 ounces as a result of planned asset integrity work, lower metal-in-concentrate and the impact of Eskom load-curtailment.
- Eskom load-curtailment (scheduled power outages) impacted both concentrators and smelters, resulting in increased work-in-progress inventory of c.38,900 PGM ounces for the period.
- PGMs sales volumes (from production, excluding sales from trading) decreased by 8% to 1,108,700 ounces due to lower refined production.
- Guidance for 2023 – 2023 guidance remains unchanged. Metal-in-concentrate PGM production is 3.6 - 4.0 million ounces. Refined production is 3.6-4.0 million ounces. Unit cost per PGM ounce produced is anticipated to be at the upper end of the range considering exchange rate volatility, load-curtailment and continued inflationary pressure. Guidance for the unit cost per PGM ounce produced is R16,800 - R17,800.
Natascha Viljoen, CEO of Anglo American Platinum, said:
“Our commitment to eliminate fatalities from our workplace helps keep our people safe. We had no work-related fatalities across our operations for the period, and we were able to considerably improve our total recordable case injury frequency rate (TRCFR), which decreased by 46% to 1.40 per million hours worked. This important milestone was realised through focused actions. We remain dedicated to embedding zero harm at all levels of the organisation.
Our total PGM production was 9% lower compared to the prior period. Production was impacted mainly by short term operational challenges and infrastructure closures at Amandelbult as well as expected lower grades at Mogalakwena. Despite mining through higher internal waste areas, Unki continues to deliver a stable tonnes output along with Mototolo.
We delivered lower refined production of 1,073,800 PGM ounces due to our planned asset integrity program at our processing operations.
While we continued to manage heightened Eskom load-curtailment, it impacted 29 production days for the quarter contributing to a build-up in work-in-progress inventory of c.38,900 PGM ounces.
We remain on track to achieve our 2023 guidance, with a strong focus on demonstrating our resilience through safe, stable, and capable operations for the remainder of the year.”
Review of the quarter
Safety
We recorded no work-related fatalities during the period at own-managed operations or Joint Operations. The TRCFR at managed operations of 1.40 per million hours improved by 46% compared to the prior period of 2.60 per million hours. The implementation of our “back to basics” safety approach has enabled us to focus on the building blocks of our safety culture and continues to contribute to our improved injury rate.
Metal-in-concentrate (M&C) PGM production
Total PGM production
Total PGM production in Q2 2023 decreased by 9% against the prior period (Q2 2022) to 943,100 ounces, with platinum production decreasing by 9% to 437,000 ounces, and palladium production decreasing by 9% to 292,500 ounces.
PGM production from own-managed mines
Total PGM production from own-managed mines decreased by 10% to 526,700 ounces.
PGM production from Amandelbult decreased by 19% to 147,900 ounces for the quarter. This is driven by short term operational challenges at Tumela which has since been mitigated, the 2022 closure of Dishaba open pit and Merensky concentrator and continued challenging ground conditions at Dishaba.
PGM production at Mogalakwena decreased by 7% to 242,400 ounces. In line with guidance, we continued to mine lower grades which resulted in a 7% reduction in 4E built-up head grade to a guided 2.70g/t compared to 2.91g/t in Q2 2022.
Unki PGM production decreased by 11% to 59,000 ounces against the prior period. The decreased production was a result of mining through planned higher internal waste areas.
Mototolo PGM production increased by 2% to 77,400 ounces, largely due to improved grade.
Eskom load-curtailment deferred own-managed mines metal in concentrate production by c.21,500 ounces.
PGM production from Joint Operations (50% own-mined production and 50% purchase of concentrate)
Total PGM production from Joint Operations decreased by 14% to 172,000 ounces.
Total Modikwa PGM production decreased by 5% against the prior quarter to 70,200 ounces due to increased mining of lower grade Merensky ore.
Total Kroondal PGM production decreased by 19% to 101,800 ounces largely due to the ramp-down at Simunye shaft and geologically challenging ground conditions across the complex.
Purchases of PGM concentrate from third parties
Purchases of PGM concentrate (POC) from third parties of 244,400 ounces is in line with prior quarter.
Refined PGM production
Refined PGM production (from owned production, excluding tolling) decreased by 13% to 1,073,800 ounces, due to planned asset integrity work at the processing operations, lower metal-in-concentrate and deferred production due to Eskom load-curtailment. Refined platinum production decreased by 18% to 489,400 ounces and refined palladium production decreased by 6% to 352,600 ounces. Eskom load-curtailment impacted 29 days of production and contributed to a concentrate work-in-progress inventory build of c.17,400 ounces for the period.
Toll refined PGM production decreased by 3% to 139,600 PGM ounces.
Base metal production
Nickel production decreased by 2% to 6,100 tonnes and copper production remained unchanged at 3,900 tonnes.
PGM sales volumes
PGM sales volumes (excluding trading) decreased by 8% to 1,108,700 ounces as a result of lower refined production. The average Q2 2023 realised basket price of $1,730/PGM ounce was 35% lower than Q2 2022.
2023 Guidance
There is no change to guidance. Metal-in-concentrate (M&C) PGM guidance for 2023 is 3.6 - 4.0 million PGM ounces(1) and refined PGM production guidance is 3.6 - 4.0 million PGM ounces, subject to the impact of Eskom load-shedding. Unit cost per PGM ounce produced is anticipated to be at the upper end of the range considering exchange rate volatility, load-curtailment and continued inflationary pressure. Guidance for the unit cost per PGM ounce produced is R16,800 - R17,800.
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.
Sponsor:
Merrill Lynch South Africa (Pty) Ltd t/a BofA Securities
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