ANGLO American Platinum (Amplats) today announced plans to slash costs and cut expenditure for a total saving of R10bn in 2024 in an effort to stave off the twin effects of lower platinum group metal (PGM) prices and inflation.
Craig Miller, CEO of Amplats said his “action plan” will reduce annual costs R5bn and stay in business capital another R5bn next year. He said Amplats will target higher margin production and put growth projects on the backburner. “These measures will allow us to capitalise on our industry leading portfolio,” he said.
The expansion of Amplats’ flagship Mogalakwena mine has been postponed after completing study work on building a third concentrator at the mine. Feasibility work will focus on moving mining at the open pit operation underground.
Similarly, with an eye on saving costs, plans to debottleneck Amandelbult’s current operating concentrators had also been stopped while the Mototolo/Der Brochen life extension is now expected to be completed in the first half of 2027.
Owing to these volume changes there will be a review of the downstream processing footprint with Amplats not proceeding with the debottlenecking of concentrators as its processing ACP units.
Commenting on the prospects for this year, Miller said concentrate and refined PGM production will be in line with previous forecasts of 3.8 million ounces but cash operating costs will be at the high end of guidance at R17,800 per PGM oz.
The cost saving measures for 2024 were aimed at achieving cash operating unit costs of R16,500 to R17,500 per PGM ounce “more than offsetting expected average input cost inflation of 6%,” the company said. Amplats has targeted $1,050/ in all-in sustaining costs for next year.
Over the next three years, Amplats has guided to own production of between 2.1 and 2.3 million oz for the next three years of which Mogalakwena will comprise about one million oz annually.
Refined production is expected to be between 3.3 and 3.7 million oz in 2024, decreasing to between three and 3.4 million oz in 2025 and 2026 in line as various third-party processing contracts become toll arrangements, and lower anticipated volumes.
Commenting on the PGM market, Duncan Wanblad, CEO of Anglo American which owns 79% of Amplats, said it “remained to be seen” how long it would persist. He added, however, he was “hearing more commentary” on a slow down in battery electric vehicles (BEVs) which do not require PGMs in their manufacture.
He said therefore that hybrid vehicles will play “a critical role” in the future which would imply an improvement in PGM demand.