Anglo American Platinum (Amplats) slumped by as much as 7% in afternoon trade on the JSE yesterday after it reported lower production and flat platinum group metals (PGM) sales for the first-quarter period ended March.
This also came in addition to Amplats reaffirming its plans to forge ahead with plans to retrench employees.
With Sibanye-Stillwater and Impala Platinum having already announced retrenchments, Amplats becomes the latest PGMs miner to retrench workers in light of continued low platinum prices.
Platinum miners are retrenching to save costs and have started to restructure their operations by curtailing capital investment and shutting down some operations.
Amplats said yesterday that it was moving ahead with negotiations with labour unions, despite mineworkers unions saying the retrenchments would worsen unemployment in the country. They want executives to take pay cuts instead of focusing on cutting jobs.
“The consultation process for the Section 189A restructuring process is well advanced, and the process will be completed as soon as practically possible,” Amplats said.
Battling lower PGMs prices, Amplats also reported yesterday that its total PGMs production for the quarter to the end of March plunged by 7% to 834 100 ounces.
Output from mines that it manages was 6% lower over the same period, dropping to 504 300 ounces, primarily at Amandelbult and Mototolo, although production from Mogalakwena and the Unki mine in Zimbabwe was broadly in line with the previous period.
The company’s refined PGMs production, excluding tolling, was flat at 628 000 ounces.
Amplats said this was “consistent with lower first-quarter production as a result of the annual stock count and planned maintenance at processing” assets.
Interestingly, Amplats CEO Craig Miller said that “Eskom load curtailment had no impact on production” during the quarter, with toll refined PGMs production increasing by 10% to 160 200 ounces for the period under review.
“While metal-in-concentrate production for the first quarter is lower than the same period in 2023, reflecting a temporary impact of the restructuring process, we remain on track to deliver against our 2024 operational guidance,” Miller said.
The company is nonetheless maintaining its production guidance for 2024 for metal in concentrate and refined production at between 3.3 million and 3.7 million ounces.
Analyst Dave Hazelwood said it would probably be difficult for PGMs miners to swing back to profitability without a recovery in rhodium prices.
“Profits (in the) last few years were driven by rhodium, but rhodium price collapsed when fibreglass makers changed production process,” he said.
Amplats’ cash operating unit cost guidance for the full year has been set at between R16 500 and R17 500 per ounce.
The company is also targeting an all-in-sustaining cost of below $1 050 per 3E ounce as it continues with a cost and capital expenditure optimisation drive.
In February, Amplats announced that it would implement cost optimisation initiatives to improve its competitiveness and to ensure the long-term sustainability of its business.
“The bulk of the cost and capex savings are expected to be realised in the second half of the year. Plans to put Mortimer smelter on care and maintenance in Q2 2024 and the studies to repurpose it for slag cleaning duty are progressing well,” it said.
In the last quarter of 2023, Amplats disposed of its 50% interest in Kroondal, resulting in Kroondal production being reported on a third-party purchase of concentrate (POC) basis from November 2023.
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