At the half year results presentation on 30 July 2003, shareholders were advised that the much stronger than anticipated rand and lower US dollar prices for the basket of metals sold, had severely affected operating cashflows. Moreover, if such prices and exchange rates were to persist, project returns and funding requirements would be further impacted.

Consequently, the Group has reviewed all aspects of its strategy and expansion programme against a backdrop of:

• The impact of a 26 percent increase in South African producer price inflation on mining costs over the past three years.
• Over the same period, despite an increase in the platinum price, a net decrease of 14 percent in the US dollar value of the basket of metals produced by the Group.
• A 50 percent appreciation in the value of the rand from its low of over R13 to the US dollar in December 2001.

Supply / demand

The review confirmed that current and future demand for platinum remain robust. Anglo Platinum remains firmly committed to expanding its production base. However, as a result of the factors discussed above, in particular because of the uncertainty of the rand’s future movements, Anglo Platinum intends to slow down the rate of implementation of its expansion projects. The effect of this slowdown on the expected ongoing platinum supply deficit is likely to be lessened by an increase in palladium usage in autocatalysts and a softening of platinum jewellery offtake. Anglo Platinum’s long-term strategy to grow markets for platinum group metals, expand production to meet the increased demand and optimise operations remains in place.

Project progress in 2003

During 2003 significant progress has been made with the expansion programme. The Polokwane smelter, designed to process concentrate from Eastern Limb operations, was successfully commissioned in March. The slag-cleaning furnace at Rustenburg was commissioned. The ACP converter plant was brought on stream and continues to increase throughput in line with its commissioning schedule. Phase 1 of the Rustenburg tailings project is being commissioned ahead of schedule. Agreement was reached with Aquarius Platinum to jointly mine contiguous properties in the Kroondal area from which revenue benefits are expected in 2004. The Bafokeng-Rasimone and Modikwa projects have continued to increase production levels.

Impact of the review

The impact of the review on Anglo Platinum’s project suite is to slow down the implementation of a number of mining projects by between one and three years. Ore treatment, smelting and refining projects will continue to be expanded to meet the requirements of the build up in the mining profile. In addition, rationalisation of existing operations will be undertaken to improve operating margins.

Consultations with stakeholders have commenced regarding the implementation of operational interventions and the project slowdown. Anglo Platinum will endeavour to soften the impact of actions taken and every effort will be made to minimise job losses.

The Group is budgeting to increase production of refined platinum from 2,3 million ounces in 2003 to approximately 2,45 million ounces in 2004. This represents a 2,0 % decline from the previously targeted production level for 2004 and is based on a rand / US dollar exchange rate of R7,0 to the US dollar. The production targets may be revised from time to time, as they remain dependent on the rand / US dollar exchange rate and the prices of the metals produced and sold by Anglo Platinum. Should the outlook improve, Anglo Platinum has the flexibility to accelerate project implementation. The production of refined platinum is now planned to increase to approximately 2,9 million ounces in 2006 compared to the 3,4 million ounce level originally envisaged.

In terms of announced projects, the Bafokeng-Rasimone and Modikwa ramp-up operations are unaffected. The Twickenham and Der Brochen projects will be slowed down. Anglo Platinum remains in discussion with its black economic empowerment partners on the Paschaskraal and Booysensdal projects and will complete bankable feasibility studies in due course, following which a joint announcement on each project will be made. The Pandora JV implementation may be slowed down in agreement with our partners. The UG2 project at Rustenburg, which sources ore from new declines and existing shafts, will be optimised to include more of the higher platinum content Merensky ore than originally envisaged in the short term. The second phase of the Rustenburg tailings project will be slowed down. The Kroondal venture will continue as originally planned.

Capital expenditure

Total capital expenditure in 2004 is now expected to be R6,2bn, comprising R2,3bn for ongoing capital expenditure, R1,8bn for production replacement projects, R1,8bn for expansion projects and R0,3bn for capitalised interest. In terms of the revised implementation programme expansion capital expenditure over the period 2003 to 2006 will reduce from R15,3bn to R11,0 bn. All capital expenditure figures are stated in 2003 money terms.

Funding

Anglo Platinum is evaluating all financing options to fund the expansion programme and expects to finalise proposals by the end of the first quarter of 2004. Anglo American has indicated that it remains supportive of Anglo Platinum’s expansion plans.

Black Economic Empowerment

Anglo Platinum has established significant joint ventures with historically disadvantaged South African groupings. The Group is pleased with the progress it has made regarding black economic empowerment. This progress includes facilitating the purchase of 22,5% of Northam Platinum by Mvelaphanda Platinum, a 50:50 joint venture with African Rainbow Minerals in respect of the Modikwa platinum mine and, subject to the fulfilment of certain suspensive conditions, the 50:50 Bafokeng-Rasimone joint venture with the Royal Bafokeng Nation incorporating the Styldrift project area. Anglo Platinum remains in discussions with the Pelawan and Khumama consortia on the Paschaskraal and Booysensdal joint venture projects respectively. The revised project scheduling will not in any way affect Anglo Platinum’s black economic empowerment commitments or ability to comply with the requirements of the Mining Charter.

Trading statement

Anglo Platinum advised shareholders on 30 July 2003 that it expected earnings for the year ending December 2003 to be significantly below those for the year ended December 2002 as a result of the stronger rand / US dollar exchange rate.

As a result of the continued strengthening of the rand and in compliance with the revised listings requirements (Section 3.4 (b)) of the JSE Securities Exchange South Africa ("JSE"), which became effective on 1 September 2003, the Company wishes to advise shareholders that headline earnings for the year ending December 2003 are expected to be substantially lower than those for the year ended December 2002.

Furthermore the Company has observed that the market consensus of forecast headline earnings for the year ending December 2003 is materially higher than the Group’s current forecast.

The difference appears to be mainly as a result of the market assuming a weaker a