Overview – Q3 2024 performance against prior period Q3 2023

• Safety performance - safety remains our number one value, and we have a number of initiatives underway to learn from experience and achieve our objective of zero harm. While no work-related fatalities were recorded for the quarter, it is with great sadness that we report the tragic loss of one of our colleagues, Mr. Basanda Glen Langeni, at Dishaba Mine, Amandelbult, on the morning of 8 October 2024.

• Own-managed mines Platinum Group Metals (PGMs) production (expressed as 5E+Au metal-in-concentrate) decreased by 9% to 552,000 ounces when compared to the prior period. This was due to self-imposed safety stoppages at Amandelbult and the primary mill breakdown at the beginning of the quarter at Mogalakwena’s North Concentrator which resulted in lower production. Despite these headwinds, our operational excellence turnaround initiatives enabled levels of M&C production consistent with Q2 2024.

• Purchase of PGM concentrate (POC) decreased by 12%¹ to 370,300 ounces, reflecting the transition of Kroondal to a 4E toll arrangement, effective from 1 September 2024, as well as lower third-party receipts.

• Refined PGMs production (owned production, excluding tolling) increased by 22% to 1,106,900 ounces primarily driven by the continued release of work-in-progress inventory compared to the same period last year.

• PGMs sales volumes (from production, excluding sales from trading) increased by 16% to 1,102,200 ounces, supported by higher refined production.

• Guidance for 2024 production guidance for 2024 for M&C is unchanged at 3.3-3.7 million PGM ounces. However, refined production guidance is revised up to 3.7-3.9 million ounces (previously 3.3-3.7 million ounces), assuming no Eskom load-curtailment. This is on the back of strong and stable performance from our processing assets, which enabled us to release built-up work-in-progress inventory.

We have delivered ~R8 billion of our targeted R10 billion cost and capital reduction programme and the consultation process for Section189A restructuring has concluded with 90% of the exits finalised and the remainder to be completed by end of 2024. Progress on our Action Plan including the business configuration changes and further cost savings mean that we remain on track to be within our cost guidance range of R16,500-R17,500 per PGM ounce for the year, more likely at the upper end of the range. We are also 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:

“Our commitment to eliminate fatalities from our workplace remains our number one value. While we had no work-related fatalities for the period, it is with great sadness and regret that we report the tragic loss of one of our colleagues at Dishaba Mine, Amandelbult, on the morning of 8 October 2024. I wish to express our heartfelt condolences to the family, friends and colleagues of Mr. Basanda Glen Langeni. We are conducting a full investigation to understand the circumstances of the incident, ensuring that lessons are learned in order to prevent any repeats of this tragic incident.

“The decrease in total PGM production of 10% for the quarter was mainly due to the breakdown at the primary mill at the Mogalakwena North Concentrator on 1 July. That resulted in a four-week downtime and a loss of 45,000 ounces, although partly offset by improved performance at the South Concentrator. The other main driver was the self-imposed safety stoppages at Amandelbult, which resulted in a loss of 20,000 ounces following the two tragic fatalities in June, while the transition of the Kroondal volumes to a 4E toll arrangement effective 1 September also played a role. Our strong performance in the latter part of the quarter, supported by our operational excellence initiatives, enabled us to maintain production consistent with Q2 2024 and we remain on track to meet M&C production guidance for 2024. The processing business had strong and stable performance through the period, and this resulted in refined production and sales rising by 22% and 16% respectively as work-in-progress inventories were released without constraints from load curtailment. Following this robust performance, we are revising our guidance upwards for refined production for the year to 3.7-3.9 million ounces, assuming no Eskom load-curtailment.

“We have continued to implement the productivity and operational excellence initiatives as part of our Action Plan to create a more resilient business. The latest initiatives are well advanced and should be fully implemented by the end of 2024. We have delivered ~R8 billion of our targeted R10 billion cost and capital reduction programme and the consultation process for Section189A restructuring has concluded with 90% of the exits finalised and the remainder to be completed by end of 2024. We also continue to progress towards a responsible and orderly separation from Anglo American. Our management team and the independent board sub-committee are working alongside a dedicated team within Anglo American to achieve this and I am confident that our demerger will be successfully completed in 2025.”

Review of the quarter

Safety

We continued to focus on initiatives to reset our safety performance, with no work-related fatalities recorded during the quarter. The independent investigation following the tragic loss of lives at Amandelbult in June 2024, has also been concluded with work underway to address the findings and embed the identified areas for improvement to prevent a repeat incident. All efforts are currently aimed at ensuring the safety of all employees and business partners engaged in high-risk work with full oversight, across all our fatal risk standards.

Total recordable injury frequency rate (TRIFR) increased to 1.57 per million hours at our operations, up from 1.32 per million hours, predominantly due to fewer hours worked as we embarked on safety stoppages across our operations, as well as a lower number of employees compared to the prior period.

Metal-in-concentrate (M&C) PGM production

Total PGM production

Total PGM production in Q3 2024 decreased by 10% against the prior period (Q3 2023), to 922,300 ounces predominantly due to lower production at Mogalakwena following the previously reported mill breakdown, the impact of the self-imposed safety stoppages at Amandelbult, and the Kroondal transition to 4E toll arrangement. Despite these negative impacts, we maintained the same levels of production compared to Q2 2024, reflecting positive progress in our turnaround initiatives and operational excellence efforts.

PGM production from own mines

Own mined production was flat quarter-on-quarter at 552,000 ounces with lower Mogalakwena production, which was offset by strong performance at the rest of the assets. PGM production decreased by 9% compared to prior period, primarily due to lower output from Mogalakwena and Amandelbult.

As flagged in the half-year results, Mogalakwena’s production of 217,800 ounces, was impacted in July by downtime and repairs caused by an electrical failure in the North Concentrator’s primary mill (45,000 ounces). The mill returned to normal operating levels at the end of July. This impact was partially offset by improved performance at the South Concentrator. Mining operations proceeded as planned, with an increase in ore tonnes mined (ex-pit grade of 3g/t) and together with stockpiles fed brought the blended grade to 2.7g/t for the quarter. The full-year blended grade guidance of 2.7-2.9g/t is maintained, albeit on the lower end.

PGM production at Amandelbult declined by 14% to 158,200 ounces, due to operational safety stoppages in July aimed at resetting safety performance, following the double fatality that occurred in June, which negatively impacted production by 20,000 ounces. However, Amandelbult maintained production levels from Q2 2024 (the best quarterly performance in the last 12 months) reflecting positive progress in its turnaround initiatives and operational excellence efforts.

Mototolo PGM production decreased by 3% to 74,100 ounces, largely attributed to difficult ground conditions as Lebowa shaft reaches its end of life, which was partly offset by an increase in production at Borwa. Production encouragingly reflected a 12% increase when compared to Q2 2024, reflecting improvements resulting from measures put in place to address skill shortages and the implementation and stabilisation of the new seven-day mining shift cycle. The development of the Der Brochen project, which will replace infrastructure closures at Lebowa, is progressing with decline access established and the development of the four declines proceeding as planned. First ore has been mined this quarter with production anticipated to ramp up in late 2025.

Unki production increased by 3% to 62,200 ounces, driven by higher underground throughput, while production at Modikwa (50% own-mined) was flat at 39,700 ounces.

Purchases of PGM concentrate

Following the disposal of our 50% interest in Kroondal effective 1 November 2023, production at Kroondal has been reported under a 100% third party purchase of concentrate (POC) arrangement, until the delivery of the agreed 1.35 million 4E ounces is achieved. With this condition now met, Kroondal transitioned from the 100% POC agreement to a 4E tolling arrangement, effective 1 September 2024, as part of the toll-and-purchase agreement established with Sibanye-Stillwater as part of the Rustenburg transaction in 2016.

On a like-for-like basis, where 100% of Kroondal volumes were included in third-party POC in the comparative period, purchase of concentrate volumes decreased by 12%. The Kroondal toll transition accounted for ~50% of this decrease, bringing the total to 370,300 ounces, reflecting lower receipts from third parties.

Refined PGM production

Refined PGM production (from owned production, excluding tolling) increased by 22% to 1,106,900 ounces primarily due to the drawdown of work-in-progress inventory during the quarter. In addition, Q3 2023 reflected the impact of an unplanned municipal water stoppage at our processing operations (54,000 PGM ounces).

Toll refined PGM production decreased by 4% to 153,800 PGM ounces for the quarter. 

There was no Eskom load-curtailment year-to-date.

Base metal production

Nickel production increased by 37% to 7,400 tonnes and copper production increased by 48% to 4,600 tonnes compared to the prior period. Q3 2023 was negatively impacted by an unplanned municipal water stoppage at our processing operations.

The delivery of the agreed chrome tonnes from Glencore, as outlined in the 2018 sale agreement that included a transfer of a 50% interest to the company, was successfully completed on 19 August 2024. As a result, the company has begun operating the chrome plant and selling 100% of its production at market-based prices. During this quarter, total chrome production amounted to 247,000 tonnes, with 17,000 tonnes attributed to the chrome plant at Mototolo.

PGM sales volumes

PGM sales volumes (excluding trading) increased by 16% to 1,102,200 ounces, supported by higher refined production.

The average Q3 2024 realised basket price of $1,477/PGM ounce was 4% (or 9% in ZAR terms) lower than Q3 2023, predominantly due to a 17% lower palladium price and 14% lower ruthenium price. The average year-to-date realised basket price is flat compared to same period in 2023.

2024 guidance

Metal-in-concentrate PGM production guidance remains at 3.3-3.7² million ounces. We are revising our refined production guidance up to 3.7-3.9 million ounces (from the previous 3.3 – 3.7 million ounces), assuming no Eskom load-curtailment. This adjustment reflects the strong and stable performance of our processing assets, which allowed us to release built-up work-in-progress inventory, in addition to no Eskom load-curtailment year-to-date.

We are on track to deliver on our cost reduction programme. The continued business configuration initiatives in the second half of 2024, supplemented by further cost savings and a step-up in production will enable us to reach the upper end of the 2024 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. 

We are working to deliver a responsible and orderly separation from Anglo American, building on a robust existing foundation to establish a valuable stand-alone company with resilient performance driven by our operational excellence initiatives. Our management team and the independent board sub-committee are working alongside a dedicated team within Anglo American to achieve this during 2025.

⁽¹⁾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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