Overview – Q2 2024 performance against prior period Q2 2023
- Safety performance - we tragically experienced two work-related fatalities at Dishaba Mine (part of Amandelbult complex) during the quarter. Total recordable injury frequency rate (TRIFR) increased by 2% to 1.48 per million hours worked at own operations compared to the prior period.
- Total Platinum Group Metals (PGMs) production (expressed as 5E+Au metal-in-concentrate) decreased by 2% to 921,000 ounces.
- Own-managed mines PGM production increased by 9% compared to Q1 2024, however decreased by 3% to 547,200 ounces when compared to the prior period.
- Purchase of PGM concentrate (POC) decreased by 2%1 to 373,800 ounces.
- Refined PGMs production (owned production, excluding tolling) increased by 7% to 1,153,500 due to the release of work-in-progress inventory compared to the same period last year.
- PGMs sales volumes (from production, excluding sales from trading) increased by 14% to 1,266,100 ounces, supported by higher refined production and a draw-down of finished goods.
- Guidance for 2024 is unchanged. Metal-in-concentrate PGM production and refined production guidance remains at 3.3-3.7 million ounces. Cash operating unit cost guidance is R16,500-R17,500 per PGM ounce and we are targeting an all-in sustaining cost (AISC) of below US$1,050 per 3E ounce.
1 On a like-for-like basis to include 100% of Kroondal volumes in the comparative period.
Craig Miller, CEO of Anglo American Platinum, said:
“We had an improved performance in the second quarter and we continue to make good progress in the reconfiguration of our business. However, it is with great regret that we report two tragic work-related fatalities at Dishaba Mine on 7 June. Our deepest condolences go out to the families, friends, and colleagues of Mr. Tshepiso Terrence Mokale and Mr. Euzmen Ndlebe. This incident occurred during a period when we have been making significant safety advancements across Anglo American Platinum and serves as a blunt reminder that we can never become complacent about workplace safety. We remain steadfast in our commitment to ensuring the safety of our workforce every day.
“Our operational excellence initiatives are yielding encouraging results. Own mine metal-in-concentrate (M&C) production increased by 9% quarter on quarter, and compared to the previous year, refined production and sales have risen by 7% and 14%, respectively. Our guidance for 2024 remains unchanged. I look forward to sharing more insights on our performance when we release our Interim Results on 22 July”.
Review of the quarter
Safety
Anglo American Platinum remains committed to eliminating fatalities; however, we sadly experienced a tragic fatal incident at Dishaba Mine. On Friday 7 June, Mr. Tshepiso Terrence Mokale and Mr. Euzmen Ndlebe lost their lives in an ore pass related incident. A Section 54 was issued on all drop-raise and site preparation blasting activities at Dishaba Mine by the Department of Mineral Resources and Energy (DMRE) and all similar workplaces were stopped with immediate effect until such time that all hazards related to this work have been thoroughly reevaluated. A full investigation of the circumstances behind the incident is currently underway and immediate lessons learned from this tragedy have been promptly shared across the business as part of our immediate call to action. We are implementing measures to prevent any recurrence in future.
Total recordable injury frequency rate (TRIFR) increased by 2% to 1.48 per million hours at our operations, up from 1.45 per million hours in the previous period.
Metal-in-concentrate (M&C) PGM production
Total PGM production
Total PGM production in Q2 2024 decreased by 2% against the prior period (Q2 2023), to 921,000 ounces. However, it marked a 10% increase from Q1 2024, reflecting early-stage progress in the operational excellence efforts at Amandelbult.
PGM production from own mines
Although PGM production from our own mines increased by 9% to 547,200 ounces compared to Q1 2024, this was a 3% decrease compared to prior period, primarily due to lower output from Mototolo, Mogalakwena and Unki, partly offset by increased production at Amandelbult.
Mototolo PGM production decreased by 14% to 66,300 ounces largely attributed to difficult ground conditions as Lebowa shaft reaches its end of life, which was compounded by a shortage of specialised skills. However, the introduction of a new seven-day mining shift cycle at the end of the first quarter had a positive contribution on mining volumes and has partially mitigated against the production shortfalls. Concurrently, the Der Brochen project, focused on replacing infrastructure closures at Lebowa, is progressing in the execution phase, with meaningful production anticipated to ramp up in 2025.
Mogalakwena’s production decreased by 4% to 232,600 ounces due to the blending of planned low-grade ore stockpiles as the new bench cut sequence progressed during the quarter, extracting higher waste tonnes in the short term. Grades are expected to increase in the second half of the year, and the full-year grade is expected to be within the guided range of 2.7 - 2.9g/t. Mogalakwena North Concentrator’s primary mill experienced an electrical failure on 1 July 2024 with repairs and mitigation plans underway and expected to be largely complete by end of July 2024. It is expected that this may have a ~5% impact on Mogalakwena M&C production in 2024.
Unki production decreased by 7% to 54,700 ounces due to mining through a planned lower-grade section. Despite the lower grades, adjustments in stope width are anticipated to restore grades to normalised levels in the second half of the year.
PGM production from Amandelbult increased by 7% to 157,600 ounces driven by higher throughput from underground infrastructures and improved grades resulting from operational efficiencies, although this was partially offset by metallurgical challenges at the plant. Following the two fatalities, Amandelbult imposed stoppages across the mine, in addition to complying with the Section 54 issued by the DMRE, to ensure that there are no repeats of the fatalities and lessons learned are embedded. It is anticipated that the stoppages will have a ~5% impact on the mine’s 2024 M&C production.
Modikwa production (50% own-mined) increased by 3% to 36,000 ounces due to higher grades.
Purchases of PGM concentrate
On a like-for-like basis, to include 100% of Kroondal volumes in the comparative period, purchase of concentrate volumes decreased by 2% to 373,800 ounces, reflecting lower receipts from third parties, as well as the planned ramp-down at Kroondal. This was partially offset by higher production from the Modikwa joint venture (the 50% POC).
Refined PGM production
Refined PGM production (from owned production, excluding tolling) increased by 7% to 1,153,500 ounces driven by the release of work-in-progress inventory compared to the same period last year.
Toll refined PGM production decreased by 5% to 132,900 PGM ounces for the quarter.
There was no Eskom load-curtailment during the quarter.
Base metal production
Nickel production increased by 20% to 7,300 tonnes and copper production increased by 18% to 4,600 tonnes due to higher throughput following the release of work-in-progress inventory.
PGM sales volumes
PGM sales volumes (excluding trading) increased by 14% to 1,266,100 ounces, supported by higher refined production and a draw-down of finished goods.
The average Q2 2024 realised basket price of $1,419/PGM ounce was 18% (or 20% in ZAR terms) lower than Q2 2023, predominantly due to a 37% lower rhodium price and 31% lower palladium price.
2024 guidance
Production guidance for 2024 for M&C2 and refined production2 is unchanged and is expected to be 3.3-3.7 million PGM ounces, subject to the impact of Eskom load curtailment. We are on track to deliver on our cost-out programme. The H1 2024 cash operating unit cost is expected to be ~R18,300 per PGM ounce due to lower production in the first half of the year. The continued business configuration initiatives in the second half of 2024, supplemented by further cost savings and a step-up in production will enable the achievement of the 2024 cash operating unit cost guidance of R16,500-R17,500 per PGM ounce and a targeted all-in sustaining cost (AISC) of below US$1,050 per 3E ounce.
The productivity and operational excellence initiatives (including the employee restructuring process) announced in February are well advanced and further details will be provided at our upcoming 2024 Interim Results.
2 Metal in concentrate (M&C) production by source is expected to be own mined of 2.1-2.3 million ounces and purchase of concentrate of 1.2-1.4 million ounces. The average M&C split by metal is Platinum: ~45%, Palladium: ~35% and Other: ~20%.
Sponsor:
Merrill Lynch South Africa (Pty) Ltd t/a BofA Securities
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