Overview – Q1 2023 performance against prior period Q1 2022
- Safety performance – No fatalities at own-managed and joint operations and an 18% improvement in the Total Recordable Case Frequency Rate (TRCFR) at managed operations to 1.78 per million hours.
- Total PGMs production (expressed as 5E+Au metal-in-concentrate) decreased by 6% to 901,200 ounces.
- Own-managed mines PGMs production decreased by 5% to 501,700 ounces, this is in line with expectations on the back of lower predicted grade from Mogalakwena and infrastructure closures at Amandelbult in 2022. Production was further impacted by unplanned extended downtime at Mogalakwena Baobab plant. This was partially offset by a strong performance at Unki and Mototolo.
- Refined PGMs production (owned production, excluding tolling) decreased by 13% to 626,000 ounces. This is lower that the comparative period where Polokwane smelter was running at full capacity. The ramp-up of the Polokwane smelter was completed by the end of January 2023. Scheduled asset integrity work at Waterval smelter and the impact of Eskom load-curtailment further impacted available smelter capacity for the quarter.
- Eskom load-curtailment (scheduled power outages) impacted both concentrators and smelters resulting in increased work-in-progress inventory of c.26,500 PGM ounces during the quarter.
- PGMs sales volumes (from production) decreased by 17% to 698,600 ounces as a result of lower refined production.
- Guidance for 2023 – There is no change to guidance. Metal-in-concentrate PGM production remains at 3.6 – 4.0 million ounces. Refined production guidance for 2023 is 3.6-4.0 million ounces. 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 continues to help us keep our people safe. We had no work-related fatalities across our operations for the period. The South African mining industry recorded its first fatality-free January in history, and we are proud to be a part of this milestone. We were able to materially improve our total recordable case injury frequency rate (TRCFR), which decreased by 18% to 1.78 per million hours worked. Through deliberate actions, we remain dedicated to our safety journey of zero injuries in the workplace.
The first quarter performance is lower than that the same period in 2022 but aligned with what we guided previously with own-managed mines PGM production 5% lower. Production was impacted by the lower grade areas we are mining at Mogalakwena for the next three years. This reduction is aligned with expectation and mine sequencing was also impacted by high rainfall as well as production impacted due to extended downtime at the Mogalakwena Baobab plant. Infrastructure closures, particularly the open pit at Amandelbult, also contributed to lower production. This was partially offset by a strong performance from Unki following the successful concentrator debottlenecking project. Mototolo continues to demonstrate stable output, despite mining in more challenging areas.
Lower refined production of 626,000 PGM ounces was impacted by the ramp-up of the Polokwane smelter following its recommissioning in December 2022, scheduled asset integrity work at Waterval smelter and the impact of Eskom load-curtailment. Eskom load-curtailment impacted ~13 production days for the quarter contributing to a build-up in work-in-progress inventory of c.26.500 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 had no work-related fatalities during the period at own-managed or joint operations. The TRCFR at managed operations of 1.78 per million hours improved by 18% compared to the prior period of 2.16 per million hours. Pro-actively managing leading indicators, contractor safety and working collaboratively with our Joint Operations on safety, contributed to our improved injury rate. We continue to focus on incorporating learnings to stop repeat incidents and increase management oversight on high-risk work.
Metal-in-concentrate (M&C) PGM production
Total PGM production
Total PGM production in Q1 2023 decreased 6% against the prior period (Q1 2022) to 901,200 ounces, with platinum and palladium production decreasing 6% to 416,800 ounces, and to 278,100 ounces respectively.
PGM production from own-managed mines
Total PGM production from own-managed mines decreased by 5% to 501,700 ounces primarily due to lower production from Mogalakwena and Amandelbult. This was partially offset by strong production performances from Unki and Mototolo.
PGM production at Mogalakwena decreased by 12% to 219,000 ounces. The extended technical downtime at the Baobab concentrator plant due to a breakdown requiring long lead replacement parts impacted production by c.15,900 ounces. As expected, we continued to see lower grade at Mogalakwena however this was further impacted by rainfall redirecting mining to lower grade areas resulting in an overall 12% reduction in the 4E built-up head grade to 2.47g/t from 2.81g/t in Q1 2022.
While overall production from Amandelbult decreased by 5% on the back of infrastructure closures and the related shut down of Merensky concentrator compared to the previous period, PGM production from Amandelbult increased by 4% to 151,500 ounces from the planned mining areas on the back of improved productivity. Production from Tumela was strong with a 3% increase, while Dishaba was negatively impacted by poor ground conditions.
Mototolo PGM production increased by 2% to 68,700 ounces, largely due to improved throughput and recoveries at the plant.
Unki PGM production increased by 17% to 62,500 ounces, benefiting from the improved plant stability post the debottlenecking project completed in Q4 2021 with improvements in throughput, grade and recoveries.
PGM production from Joint Operations (50% own-mined production and 50% purchase of concentrate)
Total PGM production from Joint Operations decreased by 10% to 168,600 ounces.
Total Modikwa PGM production remained in line with the prior quarter at 68,800 ounces.
Total Kroondal PGM production decreased by 16% to 99,800 ounces largely due to the ramp-down at Simunye shaft and geologically challenging ground across the complex.
Purchases of PGM concentrate from third parties
Purchases of PGM concentrate (POC) from third parties decreased by 3% to 230,900 ounces due to operational challenges experienced by third parties.
Refined PGM production
Refined PGM production (from owned production, excluding tolling) decreased by 13% to 626,000 ounces, due to the ramp-up at Polokwane smelter in January post the H2 2022 rebuild, scheduled asset integrity work at Waterval Smelter and the impact of Eskom load-curtailment. Refined platinum production decreased by 20% to 266,000 ounces and refined palladium production increased by 1% to 230,500 ounces. Eskom load-curtailment impacted ~13 days of production and contributed to an inventory build of c.26,500 PGM ounces across the value chain.
Toll refined PGM production decreased by 6% to 146,100 PGM ounces.
Base metal production
Nickel production decreased by 28% to 3,300 tonnes and copper production decreased by 21% to 2,700 tonnes due to the planned ramp-up at Polokwane smelter in January post the H2 2022 rebuild, scheduled asset integrity work at Waterval Smelter and the impact of Eskom load-curtailment.
PGM sales volumes
PGM sales volumes (excluding trading) decreased by 17% to 698,600 ounces as a result of lower refined production. The average Q1 2023 realised basket price of $2,131/PGM ounce was lower than Q1 2022 due to lower market prices.
2023 Guidance
There is no change to guidance. Metal-in-concentrate (M&C) PGM guidance for 2023 is 3.6 - 4.0 million ounces(1) and refined PGM production guidance is 3.6 - 4.0 million ounces, subject to the impact of Eskom load-curtailment. Unit cost guidance for 2023 is R16,800 - R17,800 per PGM ounce.
- 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.
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View Q1 2023 Production Report tables (28 KB, opens in a new window)
Sponsor:
Merrill Lynch South Africa (Pty) Ltd t/a BofA Securities