Anglo American Platinum provides an update on its operational outlook and guidance, to coincide with the Anglo American plc market update.
Natascha Viljoen, Chief Executive Officer of Anglo American Platinum, commented:
“We have been able to bring production back to almost normal capacity levels despite the impact of Covid-19 on our operations and people this year. This shows the incredible way our people have adapted to new working environments and embraced new protocols that help protect the health and safety of our employees and host communities. As a result of embedding these protocols, we expect to return to normal production levels from 2021 onwards, barring any new restrictions in the event of further Covid-19 waves.
“We are pleased that we have safely and successfully rebuilt the ACP Phase A unit and brought it to full operation ahead of schedule in early December. We have begun to re-establish the processing pipeline to finished metals. The installed capacity of the ACP will allow us to refine the metal we produce, as well as release the build-up in work-in-progress inventory, which will likely take up to 24 months.”
Operational outlook and guidance
Shareholders are referred to the SENS announcement on 7 December 2020 in relation to the safe and successful rebuild of the ACP Phase A unit. As a result of the early completion of this work, the Company upgraded refined production guidance for 2020 to between 2.6 – 2.7 million PGM ounces. Sales volumes have also been upgraded to c.2.8 million PGM ounces, as minor metal refined inventories are drawn down.
Despite the effects of the pandemic, metal in concentrate (M&C) production returned to close to normal operating capacity in the second half of 2020. As a result, M&C production for 2020 will be between 3.6 – 3.8 million PGM ounces.
Due to the temporary closure of the ACP during the year, there will be a build-up of c.1 million PGM ounces in work-in-progress inventory by the end of the year, including the impact of processing recovery losses. The release of work-in-progress inventory built up in 2020 is expected to take up to 24 months. Due to planned maintenance on other processing assets in 2021, we expect greater release of work-in-progress inventory in 2022 than 2021.
As a result, updated operational guidance for the next three years is forecast as follows:
Unit cost guidance for 2020 is unchanged at R11,800 – 12,200 per PGM ounce. Unit cost guidance for 2021 will be R11,000 – 11,500 per PGM ounce, which reflects the recovery in production as operations return to normalised levels of production, partially offset by inflationary increases.
Capital expenditure in 2020 is unchanged at R5.7 – 6.5 billion.
The Anglo American plc investor update presentation is available on the Anglo American website at: https://www.angloamerican.com/investors/investor-presentations.