Platinum group metals (PGMs) play a crucial role in advancing a cleaner world, despite the current low prices, according to Anglo American Platinum CEO Craig Miller. The company delivered strong half-year results as it moved forward with its separation from the Anglo-American group.
“Our market efforts ensure our products impact the world positively. We’re capturing value from adjacent value chains and diversifying future PGM demand sources,” Miller noted. By the end of next year, Anglo Platinum aims to be an independent, Johannesburg-listed mining and marketing company.
In the first half of this year, significant progress was made in marketing. Platinum Guild International developed Inoveo platinum, a new jewelry alloy, utilizing AI and digital technology. This alloy has the potential to drive demand for over 300,000 ounces of platinum annually. Inoveo has been well received in the U.S., and a global expansion is planned, beginning in India.
In the automotive industry, Anglo Platinum is promoting green-hydrogen taxi mobility in Europe by teaming up with Hype, the official taxi provider for the 2024 Paris Olympic Games. They are also planning to expand their operations into Hamburg. If one in ten cars becomes a fuel cell electric vehicle (FCEV), it could create a yearly demand for six million ounces of platinum.
In battery technology, extensive testing at Indiana’s Battery Innovation Center showed a 20% increase in energy density and a 40% cost reduction in lithium-sulfur batteries. The next step involves exploring product development and commercialization pathways. If adopted at scale, Lion Batteries could significantly demand palladium and platinum.
To diversify demand in the U.S., Europe, and China, Anglo Platinum has launched three research projects using PGMs. They developed technology for data centers and microchip processes, increasing speed and reducing energy consumption. This represents a substantial PGM demand source in the era of big data and AI.
“We see many future opportunities by leveraging PGMs’ unique characteristics in new applications,” Miller said.
Regarding the demerger, Miller emphasized the tools needed to thrive independently. “We have a credible platform, world-class mines, and strength across the value chain, from technical know-how to global marketing capabilities,” he said. He expressed optimism about the long-term PGM price outlook.
Anglo Platinum chairperson Norman Mbazima praised the company’s efforts to achieve its potential despite challenging commodity prices. “Real change is hard but beneficial, and we see these benefits in our performance. We look forward to the future with confidence and excitement,” he stated.
Mbazima likened the demerger to a child leaving home. “Everyone wants us to succeed. With a strong foundation, we will build a successful independent business for all stakeholders.”
Anglo Platinum CFO Sayurie Naidoo described the first-half performance as resilient, reflecting cost reductions from corporate and operational restructuring, efficiency improvements, and contract negotiations. The cost reductions totaled R2.9 billion, with R1.2 billion from consumables, R700 million from contractor and labor reductions, and R400 million in other costs. Overhead and corporate costs were cut by R600 million due to the corporate restructuring completed in 2023.
Further cost savings are expected in the second half of 2024. Anglo Platinum ended the first half of 2024 with a R14.5 billion net cash position. Refined PGM production increased by 5% to 1.78 million ounces, while metal-in-concentrate was 5% lower at 1.76 million ounces. Sales volumes rose 9% on inventory drawdown, with earnings of R12.3 billion on a PGM dollar basket price of $1,442.
The all-in sustaining cost (AISC) of $957 per three-element (3E) ounce was well ahead of the below-$1,050 target, sustaining cash generation through a low PGM price cycle.
Statutory employee restructuring consultations are complete, and Mortimer Smelter is on care and maintenance. The action plan includes R10 billion in yearly cost savings from operating costs and stay-in-business capital, with R4.7 billion achieved in the first half of the year. The measures are expected to result in a cash operating unit cost of R16,500 to R17,500 per PGM ounce and an AISC below $1,050 per 3E ounce in 2024.
As Anglo Platinum moves towards independence, its strategic efforts and cost-saving measures position it well for future success, ensuring PGMs continue to play a vital role in a greener world.
Source: Mining Weekly
