Anglo Platinum continues to deliver

[] — Anglo Platinum (AngloPlat) is the standout performer in the September quarter production update from Anglo American as the group’s turnaround under CEO Neville Nicolau continues.

AngloPlat increased its attributable production of equivalent refined platinum ounces to 648,000oz in the September quarter, which is 8% up on the June quarter and 5% up on the 2009 September quarter.

Total platinum production – including material purchased from third parties like JV partners Aquarius Platinum and Xstrata – was 697,000oz which was 26% up on the 554,000oz produced in the June quarter.

The group said it was confident it would meet its production target of 2.5m oz for the financial year to end-December 2010.

It added the increase in production from AngloPlat’s own mines – full margin ounces – “reflects positively on initiatives implemented to improve labour productivity and operational flexibility and the effectiveness of measures implemented to deal with major production challenges experienced during the first half of 2010.’

The group said its production for 2010 to date had been hit by a number of unexpected events.

These included the simultaneous intersection of five major potholes at the Khomanani mine; shaft haulage failures and safety stoppages at the Tumela and Union mines and challenging geological conditions at Richard shaft.

Costs have been held almost in line with the stated target of R11,000 per oz of equivalent refined platinum.

“The year-to-date September 2010 cash operating cost was R11,647/oz, largely in line with our target despite above inflation increases in wages (up 8.5% since July 1, 2010) and electricity (up 25%).

“This will be the third year AngloPlat keeps unit cost increases to below inflation and largely in line with R11,000/oz,’ the group said.

AngloPlat said indications for the first nine months of 2010 supported its prediction that the platinum market would be in balance this year because of a recovery in demand coupled with sluggish increase in supply.

The group said platinum demand remained firm as vehicle production continued to increase.

“The consequent restocking of autocatalyst metal inventory levels; metal inventory increases in industrial applications and firm jewellery and investment demand are sustaining the platinum price well above Anglo Platinum’s average forecast for 2010 of $1,500/oz.’


Turning to iron ore Anglo American reported that total production at 11.8mt was 3% higher than the June quarter but production from Kumba Iron Ore’s Sishen mine had dropped 0.6mt to 10.1mt when compared with the 2009 September quarter.

Reasons were lower output from the dense media separation (DMS) plant because of unplanned crusher maintenance and forced shutdowns because the finished product stockpiles were full.

Anglo added Kumba’s export sales dropped to 8.3mt – 13% lower than the June quarter and 12% down on the September 2009 quarter – because of derailments and maintenance work on the Sishen-Saldanha railway line.

The group said that, “during the quarter, three separate derailments occurred on the Sishen/Saldanha freight line operated by Transnet and annual maintenance was carried out on the line in August.’

The build-up of diamond production by De Beers continued reaching 9m carats in the September quarter compared with 8.4m carats in the June quarter and 7.9m carats in the September 2009 quarter.

That growth was in response to market demand in advance of the holiday retail seasons, which run from Thanksgiving through to Christmas and include Diwali.

The higher output came from De Beers operations in South Africa and Botswana offset by lower recoveries from Namibia and Canada.