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Anglo Pt aims at 14% output lift Posted: Mon, 31 Jul 2006 [miningmx.com] -- ANGLO Platinum said refined platinum production would increase by as much as 14% for the 2006 financial year amid a thriving platinum market that would support metal prices above $1,100/oz. Commenting in its interim results to June, in which it posted a more than doubling in headline earnings to R4.5bn, Anglo Platinum said it expected full year output of between 2.7 to 2.8 million oz of refined platinum. This compares to refined platinum output of 2.45 million in the 2005 financial year. Demand for platinum was robust even among jewellers in China who had seen the platinum price increase a quarter this year. "Recent experience suggests that the resilience of jewellery consumption, particularly in the Chinese market, continues even at prices over $1,100/oz adding confidence to our long term view," the company said. "This market position is expected to continue for some time," it said. The improvement in interim headline earnings year-on-year was due to increased metal prices and higher output. Of the R5.81bn improvement in net sales revenue for the period, about R5bn was derived from improved metal prices. However, cost of sales increased 28% to R10.4bn which Anglo Platinum said was owing to a doubling of concentrate purchases and higher smelting and refining costs. Leon Esterhuizen, a precious metals analyst for Investec Securities, said the market expected "a real cost reduction over the next six to nine months." "Anglo Platinum had been spending money on improving flexibility on its mines and the benefits of this would come through from a high base," he said. Year-on-year costs were higher but lower when comparing successive interim periods, he said. Anglo American, which owns 74.8% of Anglo Platinum, said it would report underlying earnings from Anglo Platinum of $492m for the interim period. Anglo American is scheduled to report its interim results on August 4. Said Anglo Platinum CEO Ralph Havenstein: “We are pleased with the ongoing robust demand for platinum group metals at current prices and with our record half-year financial performance. We remain focussed on increasing production at improved operating efficiencies.” Anglo Platinum's share price was 7.5% higher at R651/share. The platinum index was 1% higher with Impala Platinum, the world's second largest platinum producer behind Anglo Platinum, last up 1.5% at R1,228/share. Capital expenditure for Anglo Platinum was forecast to accelerate to between R5.5bn and R6bn by the year-end from R1.84bn in the first six months of the year. Anglo Platinum approved projects totalling R5.7bn in capital expenditure in the first half of the financial year including the R3.8bn PPRust North expansion project that will see output grow an additional 230,000 oz/year of platinum by 2009. Proposals for the sinking of the Paardekraal 2 shaft, expected to sap R2bn in funds, was scheduled for consideration shortly, Anglo Platinum said. If approved, Paardekraal would access deeper Merenksy reserves at a rate of 100,000 tons/month and provide 120,000 oz/year of replacement platinum by 2015.Free news alerts: click here to subscribe
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