www.miningmx.com | platinum Anglo Platinum 2007 target now down 400,000 oz

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Anglo Platinum 2007 target now down 400,000 oz
Allan Seccombe
Posted: Fri, 16 Nov 2007

[miningmx.com] -- Anglo Platinum will produce 150,000 oz less refined platinum than the already reduced 2.6 to 2.65 million oz target it set in July this year because of safety issues, bringing the total cut this year to some 400,000 oz.

The world's leading platinum supplier said in July it had lowered its targets for the year from between 2.8 million and 2.9 million oz because of the safety drive to around 2.6 million oz.

Anglo Platinum now expects to produce between 2.45 million and 2.5 million oz this year because of the focus on improving safety, strikes and a lack of skilled labour, the company said on Friday, basing its forecast on actual production up to the end of October.

"The impact on Anglo Platinum�s production levels in 2008 is currently being evaluated and an estimate will be provided when results for the financial year to 31 December 2007 are released," the company said in a statement.

Johnson Matthey estimated in its 2007 interim review that the market for the year would be in a 265,000 oz deficit because platinum supplies from South Africa, the world's largest source of platinum, would not meet expected targets.

Demand for platinum was put at a record 6.925 million oz for 2007, up nearly three percent from the previous year. Supply will be lower than that for 2006 by 135,000 oz and stand at 6.66 million oz.

"Sales from South Africa will fall, by 70,000 oz, to 5.22 million oz. Output has been lost as a result of a combination of safety-related shutdowns, industrial action and the closure of a smelter by Lonmin for a rebuild," Johnson Matthey said on 13 November.

When Anglo Platinum announced in October it was shutting three shafts at its Rustenburg mine after a worker was killed underground the platinum price shot up to record highs on supply concerns in a tight market.

Anglo Platinum is estimated to have lost 9,000 oz of refined platinum in the shut down that at the prevailing spot price then cost the company some $13m in lost production.

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Anglo Platinum had already shut the mine after a spate of deaths this year to re-educate its workforce on safety. Ralph Havenstein, then CEO, quit his job over the safety issue after 12 workers died at Rustenburg in the first half of the year. It was widely speculated that he had come under enormous pressure from Anglo American CEO Cynthia Carroll over the safety record at its 75%-held subsidiary.

Rustenburg was shut for seven days in June.

Anglo Platinum decided to suspend production at its Turfontein shaft at Rustenburg for 134 days to replace steelwork and service columns from 16 November this year at a cost of some 9,000 oz.

It will shut its other mines for one day to drive home the safety message that the South African government has started taking a whole lot more seriously recently. The government has begun enforcing temporary shaft shutdowns after underground deaths to audit safety procedures.

Anglo Platinum also attributed 2007's reduced output to "the increased frequency and duration of suspension of production by the regulatory authorities including the Kroondal Joint Venture where production was suspended today (Friday)."

The National Union of Mineworkers is involved in regulatory procedures to clear the way for a one-day industry-wide strike to protest the ongoing deaths on South African mines. Anglo Platinum included this in its 2007 forecast.

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