ANGLO American Platinum’s (Amplats’) production forecast for 2022 would be at risk if Eskom implemented significant power rationing between now and December, said the group’s CEO Natascha Viljoen.
“It is definitely a concern for us in the second half,” said Viljoen in an interview today. “We have the Polokwane smelter down in the second half which means that when we have an Eskom abatement we do it from a lower baseload”.
Viljoen’s comments come just as Eskom, South Africa’s state-owned power company, warned it could resume ‘load-shedding’ (rotational power rationing) following the loss of generating capacity at its Kriel coal-fired power station.
On July 22, Eskom ended almost five weeks of continual load-shedding which reached its worst levels in over two years. Viljoen told Miningmx previously that if loadshedding reached 6,000MW at any one time if would have to shut mining and concentrator activities at its mines.
Below this threshold, the company’s refineries could catch up on lost production.
Amplats has guided to refined production of between four to 4.4 million oz for the 12 months ended December. Unit cost guidance of between R14,000 to R15,000 per platinum oz assuming an oil price of $100 per barrel.
“As an intensive user [of electricity] we have an agreement with Eskom in place to reduce a certain percentage, but we start from the actual baseload on the day,” Viljoen said. “Normally, we can protect production because our base load is lower, so that is a concern for us in the second half.”
“If loadshedding happens in the second half we might have to push back into areas where we don’t have catch up capacity. So there is a risk in that area.”
There was less risk of power rationing in Zimbabwe, said added.
Amplats lost about 6,000 ounces of platinum group metal (PGM) production in the first half of the year – a loss the company described as “negligible” in its results presentation today.
Production of refined PGMs for the first six months was 1.96 million oz compared to 2.33 million oz in the first half of the previous financial year when the company was clearing a significant inventory of metal built up previously.