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Amplats unpacks lower production expectations, Mogalakwena plans

Amplats CEO Natashca Viljoen

Amplats CEO Natashca Viljoen

9th December 2022

By: Marleny Arnoldi

Deputy Editor Online


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Platinum group metals (PGMs) miner Anglo American Platinum (Amplats) has revised downward its production expectations for 2023, in line with new operating conditions.

The company’s metal-in-concentrate (M&C) production guidance has been revised downward to between 3.6-million and 4-million ounces, from between 4.1-million and 4.5-million ounces previously.

Refined PGMs production has been revised down to between 3.6-million and 4-million ounces, down from between 3.8-million and 4.2-million previously.

Accordingly, the production guidance for 2024 has also been revised downward to the same levels as 2023. For 2025, Amplats is expecting M&C production of between 3.5-million and 3.9-million ounces and refined PGMs production of between 3.3-million and 3.7-million ounces.

PGMs production for this year remains in line with guidance at four-million ounces for M&C and 3.8-million ounces for refined PGMs.

CEO Natashca Viljoen says the company continues to experience high levels of inflationary cost pressures, leading to a unit cost of about R15 300/oz, or $950/oz, and therefore will continue with cost mitigation and containment measures in 2023.

She says the production guidance for the next few years has been adjusted to ensure a safe and stable operational momentum.

Particularly, the M&C production is being impacted on by lower grades at the Mogalakwena mine and lower volumes from the Amandelbult mine, the latter of which is as a result of challenging geological ground conditions and the opencast operation coming to the end of its mine life.

Amplats also expects to receive lower purchase-of-concentrate volumes than previously anticipated, in that its Kroondal operation, which is 50% own-mined material and 50% purchase-of-concentrate material, is coming towards the end of its mine life and will switch to a tolling agreement in 2024.

Additionally, Amplats’ Siyanda purchase-of-concentrate agreement is switching to a tolling agreement in 2025, resulting in lower M&C production volumes and reflecting the changes in commercial terms.

The company has decided to close its aging Merensky concentrator, which will also impact on M&C production, and rather use the UG1 and UG2 concentrator plants for processing. The cost benefits in closing the plant will be about R200-million a year.

Meanwhile, Amplats will make a decision in the next 18 to 24 months on whether to build a third concentrator at the Mogalakwena mine, keeping in mind capital efficiency, improved technology deployment and supply chain and inflationary pressures.  

The company is progressing six workstreams on the Future of Mogalakwena programme, including the investigation of underground opportunities, optimisation of the mine plan and operational performance, deployment of technology such as hydrogen fuel cell trucks, and expanding concentrator capacity.

Viljoen elaborates that the additional time for deciding on the third concentrator allows the company to improve capital efficiency. “There is minimal net present value impact from starting construction in 2026 or 2028 owing to availability and quality of ore to be fed into the concentrator. As the twin underground decline ramps up, higher-grade material will be available to feed into the concentrator, which offsets the 18- to 24-month decision timeline to start construction of a third concentrator.”

Moreover, the company started rebuilding its Polokwane smelter in the third quarter, with reheating of the smelter due to start on December 10 and first matte tap expected early in January.

Owing to loadshedding and a resultant delay in the Polokwane smelter’s rebuild, Amplats says total built-up inventory at the end of the year will be about 350 000 oz, the majority of which will be refined next year and the balance in 2024.

Amplats’ total capital expenditure for this year is expected to be R17.3-billion, including stay-in-business capital of R9.5-billion.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online




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