Anglo American Platinum anticipates a 15% to 25% drop in earnings for the first half of this year compared to 2023. The company expects basic earnings to fall between R5.8 billion and R6.6 billion, with earnings per share ranging from 2,204c to 2,508c.
The decrease is attributed mainly to a 24% lower rand PGM basket price. Palladium and rhodium prices saw significant declines of 34% and 49%, respectively.
Despite lower prices, revenue loss was somewhat offset by a 9% increase in PGM sales volumes. This was due to higher refined production and a drawdown of finished goods.
“We’ve delivered cost savings in the first half of the year in line with our cost-out program,” said Anglo American Platinum CEO Craig Miller.
Total PGM production for the second quarter ending June 30 decreased by 2% to 921,000 ounces. While production from own-managed mines increased by 9% quarter-on-quarter, it was 3% lower year-on-year at 547,200 ounces. Purchase of PGM concentrate also decreased by 2% to 373,800 ounces.
Refined PGM production rose by 7% to 1,153,500 ounces, and sales volumes increased by 14% to 1,266,100 ounces. This increase was supported by higher refined production and a drawdown of finished goods.
Full-year guidance for metal-in-concentrate PGM production and refined production remains unchanged at 3.3 million to 3.7 million ounces. The cash operating unit cost guidance is R16,500 to R17,500 per PGM ounce. The company targets an all-in sustaining cost of below $1,050 per 3E ounce.
Commenting on the second-quarter performance, Miller said, “We continue to make good progress in the reconfiguration of our business.”
However, he expressed regret over two tragic work-related fatalities at the Dishaba mine on June 7. He extended condolences to the families, friends, and colleagues of Tshepiso Terrence Mokale and Euzmen Ndlebe.
“This incident occurred during a period when we have been making significant safety advancements across Anglo American Platinum. It 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,” Miller said.
A full investigation into the incident is underway. Immediate lessons learned from the tragedy have been shared across the business as part of an immediate call to action.
The total recordable injury frequency rate increased by 2% to 1.48 per million hours, up from 1.45 per million hours in the previous period.
Although second-quarter production decreased by 2% compared to the same period last year, it was 10% higher than the first quarter. This reflects early-stage progress in operational excellence efforts at the Amandelbult PGM mine.
PGM production from Amandelbult increased by 7% to 157,600 ounces. This was driven by higher throughput from underground infrastructures and improved grades resulting from operational efficiencies, although partially offset by metallurgical challenges at the plant.
Production from the flagship Mogalakwena mine fell by 4% to 232,600 ounces due to the blending of planned low-grade ore stockpiles. 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. The full-year grade is expected to be within the guided range of 2.7 g/t to 2.9 g/t.
The Mogalakwena North Concentrator’s primary mill experienced an electrical failure on July 1. Repairs and mitigation plans are underway and expected to be largely complete by the end of this month.
Production at the half-owned Modikwa mine increased by 3% to 36,000 ounces on higher grades.
Toll refined PGM production decreased by 5% to 132,900 PGM ounces for the quarter in which there was no Eskom load curtailment.
In base metals, nickel production increased by 20% to 7,300 tons, and copper production increased by 18% to 4,600 tons. This was due to higher throughput following the release of work-in-progress inventory.
PGM sales volumes, excluding trading, increased by 14% to 1,266,100 ounces. This was supported by higher refined production and a drawdown of finished goods.
Source: Mining Weekly
