Amplats keeps full-year guidance even though third-quarter output slips
Refined PGM production hit by five-day water supply interruption at the group’s Rustenburg processing facilities
24 October 2023 - 15:33
by Andries Mahlangu
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Anglo American Platinum (Amplats) on Tuesday said third-quarter refined platinum group metal (PGM) output declined 9% year on year, mainly as a result of water supply disruptions at its Rustenburg processing facilities.
The quarterly production update is the first under CEO Craig Miller, who officially took over from Natascha Viljoen on October 1. Viljoen has joined US-based gold mining company Newmont Corp as COO.
Miller’s arrival has coincided with a steep fall in PGM basket prices while cost pressures remain elevated, worsened by a persistently weaker rand/dollar exchange rate.
“Cost pressures remain a challenge for the company and the sector. That, coupled with a PGM basket price that is well below its highs has squeezed margins and earnings,” said Saleho Tsatsi, investment analyst at Anchor Capital.
The world’s biggest platinum miner by value produced 909,700oz of refined PGMs in the three months to September compared with 994,800oz during the same period last year after a five-day interruption to the water supply at its processing operations in Rustenburg. The disruption led was directly responsible for a 54,000oz drop in refined PGMs and 26,000oz of metal concentrate.
Mine PGM output declined 2% year on year in the review period mainly as result of lower grades at the Mogalakwena mine and poor ground conditions at Amandelbult, the group’s two largest mines.
The miner said national power cuts that hit production during the first half of the year had a minimal impact during the third quarter. Amplats kept its refined production guidance for 2023 unchanged at between 3.6-million ounces and 4-million ounces.
Prices for PGMs, which are mostly used in the production of catalysts that curb toxic vehicle emissions, have continued to fall this year amid global economic uncertainty. Amplats recorded a 39% decline in the average price of its basket of PGMs during the September quarter.
The group’s shares were down 4.16% at R620.34 at 3.05pm.
“I believe investors are increasingly starting to get used to the idea that markets are too strong given the headwinds that are facing the globe,” said Casparus Treurnicht, portfolio manager at Gryphon Asset Management
“The macro-economic picture does not look good. We only need to look at interest rates to get a sense of what is very negative but still hiding in the dark.”
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Amplats keeps full-year guidance even though third-quarter output slips
Refined PGM production hit by five-day water supply interruption at the group’s Rustenburg processing facilities
Anglo American Platinum (Amplats) on Tuesday said third-quarter refined platinum group metal (PGM) output declined 9% year on year, mainly as a result of water supply disruptions at its Rustenburg processing facilities.
The quarterly production update is the first under CEO Craig Miller, who officially took over from Natascha Viljoen on October 1. Viljoen has joined US-based gold mining company Newmont Corp as COO.
Miller’s arrival has coincided with a steep fall in PGM basket prices while cost pressures remain elevated, worsened by a persistently weaker rand/dollar exchange rate.
“Cost pressures remain a challenge for the company and the sector. That, coupled with a PGM basket price that is well below its highs has squeezed margins and earnings,” said Saleho Tsatsi, investment analyst at Anchor Capital.
The world’s biggest platinum miner by value produced 909,700oz of refined PGMs in the three months to September compared with 994,800oz during the same period last year after a five-day interruption to the water supply at its processing operations in Rustenburg. The disruption led was directly responsible for a 54,000oz drop in refined PGMs and 26,000oz of metal concentrate.
Mine PGM output declined 2% year on year in the review period mainly as result of lower grades at the Mogalakwena mine and poor ground conditions at Amandelbult, the group’s two largest mines.
The miner said national power cuts that hit production during the first half of the year had a minimal impact during the third quarter. Amplats kept its refined production guidance for 2023 unchanged at between 3.6-million ounces and 4-million ounces.
Prices for PGMs, which are mostly used in the production of catalysts that curb toxic vehicle emissions, have continued to fall this year amid global economic uncertainty. Amplats recorded a 39% decline in the average price of its basket of PGMs during the September quarter.
The group’s shares were down 4.16% at R620.34 at 3.05pm.
“I believe investors are increasingly starting to get used to the idea that markets are too strong given the headwinds that are facing the globe,” said Casparus Treurnicht, portfolio manager at Gryphon Asset Management
“The macro-economic picture does not look good. We only need to look at interest rates to get a sense of what is very negative but still hiding in the dark.”
With Reuters
mahlangua@businesslive.co.za
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