Overview – Q1 2024 performance against prior period Q1 2023
- Safety performance – No work-related fatalities for the period and total recordable case frequency rate (TRCFR) maintained at 1.88 per million at own operations.
- Total Platinum Group Metals (PGMs) production (expressed as 5E+Au metal-in-concentrate) decreased by 7% to 834,100 ounces.
- Own-managed mines PGMs production decreased by 6% 1 to 504,300 ounces primarily at Amandelbult and Mototolo, while both Mogalakwena and Unki’s production were in line with prior period.
- Purchase of PGM concentrate (POC) decreased by 10% 1 to 329,800 ounces.
- Refined PGMs production (owned production, excluding tolling) was 628,000 ounces, similar to the prior period.
- PGMs sales volumes (from production, excluding sales from trading) were broadly flat at 707,500 ounces.
- Guidance for 2024 - Our guidance for 2024 remains unchanged. Metal-in-concentrate PGM production and refined production guidance remains between 3.3-3.7 million ounces. Cash operating unit cost guidance is between R16,500 - R17,500 per PGM ounce and targeting an all-in-sustaining- cost (AISC) of below US$1,050 per 3E ounce.
Craig Miller, CEO of Anglo American Platinum, said:
“The safety of our colleagues is our first priority. We have now operated more than 27 months without a work-related fatality. This demonstrates our unwavering commitment to safe and sustainable operations. The cost and capital expenditure optimisation initiatives supported by the restructuring process announced in February are well under way. Our action plan remains focused on safe, efficient and stable production through the cycle, which will increase our resilience as a business. While metal-in-concentrate production for the first quarter is lower than the same period in 2023, reflecting a temporary impact of the restructuring process, we remain on track to deliver against our 2024 operational guidance.”
Review of the quarter
Safety
There have been no fatalities at our operations in the past 27 months, which is our longest fatality-free period. Total recordable case frequency rate (TRCFR) was similar to Q4 2023 at 1.88 per million hours; however, it regressed 7% compared to the prior period of 1.75 per million hours. We are continuing with the focused implementation of our safety practices to ensure that each of our colleagues returns home safely every day.
Metal-in-concentrate (M&C) PGM production
Total PGM production
Total PGM production in Q1 2024 decreased 7% against the prior period (Q1 2023) to 834,100 ounces.
PGM production from own mines
We disposed of our 50% interest in Kroondal in Q4 2023, resulting in Kroondal production being reported as a third-party purchase of concentrate (POC) agreement from November 2023. Total PGM production from own mines (excluding Kroondal), decreased by 6% to 504,300 ounces, primarily due to lower production from Amandelbult and Mototolo, while production from Mogalakwena and Unki was flat for the quarter.
PGM production from Amandelbult decreased by 16% to 127,100 ounces driven by lower recoveries and tonnes milled. Tonnes milled decreased as a result of plant equipment breakdowns and lower throughput from Dishaba due to challenging ground conditions and short-term impact of the implementation of the restructuring program to improve productivity and efficiencies.
Mototolo PGM production decreased by 10% to 61,900 ounces as a result of lower throughput due to mobile mining equipment stoppages associated with the implementation of mandatory human proximity detection systems and challenging ground conditions as Lebowa shaft reaches its end of life. This was partially offset by higher grades. The mine initiated a new mining shift cycle to increase underground production and improve efficiencies. The Der Brochen project, which will replace the Lebowa infrastructure closures, is in execution phase with production ramping up in 2025.
Mogalakwena’s production was in line with prior period at 219,500 ounces, but 17% lower versus Q4 2023. This decline in production quarter on quarter was due to mining planned low-grade material, as mining activities transitioned to a different bench cut sequence in the pit and available ore was supplemented from low-grade ore stockpiles. The optimised mine plan and extraction sequence, together with the newly commissioned rope shovel supports the mine achieving 2024 M&C production guidance and anticipated full year grade of between 2.7 and 2.9 g/ton.
Unki production was unchanged at 62,800 ounces compared to the prior period.
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 10% to 329,800 ounces, reflecting lower receipts from third parties, as well as the planned ramp-down at Kroondal.
Refined PGM production
Refined PGM production (from owned production, excluding tolling) was similar to the prior period at 628,000 ounces, which is consistent with lower first quarter production as a result of the annual stock count and planned maintenance at processing assets.
Eskom load-curtailment had no impact on production during the quarter.
Toll refined PGM production increased by 10% to 160,200 PGM ounces for the quarter.
Base metal production
Nickel production increased by 42% to 4,700 tonnes and copper production increased by 22% to 3,300 tonnes. Q1 2024 benefited from higher-than-normal work-in-progress smelter matte inventory, following the release of the built-up concentrate stocks in 2023. An optimised annual maintenance shut at the Base Metals Refinery decreased plant downtime and increased operating efficiency.
PGM sales volumes
PGM sales volumes (excluding trading) were broadly flat at 707,500 ounces. The higher sales to refined production was due to a drawn down of ruthenium, platinum and rhodium finished goods inventory.
The average Q1 2024 realised basket price of $1,483/PGM ounce was 30% (or 26% in ZAR terms) lower than Q1 2023, predominantly due to a 61% lower rhodium price and 38% lower palladium price.
2024 guidance and action plan update
Production guidance for 2024 for metal in concentrate (M&C)2 and refined production2 is unchanged and is expected to be between 3.3-3.7 million PGM ounces, subject to the impact of Eskom load-curtailment.
As announced in February, we continue to implement various cost and capital expenditure optimisation initiatives to improve our competitive position and ensure the long-term sustainability of our business for the benefit of all our stakeholders. The bulk of the cost and capex savings are expected to be realised in the second half of the year.
Unit cost guidance for 2024 of R16,500 - R17,500 per PGM ounce and all-in-sustaining-cost (AISC) of below US$1,050 per 3E ounce, is consistent with the guidance provided in December 2023.
Plans to put Mortimer smelter on care and maintenance in Q2 2024 and the studies to repurpose it for slag cleaning duty are progressing well. Mass pull reductions of 5% and 10% were achieved at Amandelbult and Mogalakwena respectively in Q1 2024, demonstrating the work already under way to achieve the targeted reductions by 2025.
The consultation process for the Section 189A restructuring process is well advanced, and the process will be completed as soon as practically possible.
1 On a like-for-like basis to include 100% of Kroondal volumes in the comparative period.
2Metal 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%.
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