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Enacy Mapakame

Business Reporter

PLATINUM producer, Unki Mine’s South African parent company -Anglo American Platinum has reported significant growth in earnings for the half year to June 30, 2021 underpinned by high prices for platinum group metals PGMs) and a solid operational performance from its mining and processing assets.

At Unki, total PGM production rose 23 percent to 98,900 ounces from 80 300 ounces recorded during the same period last year.

Platinum production rose 24 percent to 44,100 ounces while palladium was 22 percent above prior year period to 38 700 ounces

Production at Unki suffered no impact from Covid-19, with greater throughput and higher concentrator recovery being primarily responsible for the improvement in output.

For the six months under review, Unki’s earnings before interest, taxes, depreciation and amortisation (EBITDA) was R3,2 billion from R562 million in the comparable period.

The mine delivered an EBITDA margin of 63 percent from 28 percent during the same period in 2020. 

Cash operating costs increased by 12 percent to R1,2 billion. Cash operating costs per PGM ounce, however, benefited from higher production volumes and strengthening of the rand, decreasing by 9 percent to R12 536 per ounce.

Meanwhile, the Unki de-bottlenecking project is in execution and it includes upgrades of the flotation circuit, the primary mill and other ancillary equipment.

 Expansion of installed infrastructure will increase capacity from 180 000 tonnes per month (tpm) to 210 000 tpm. The project is on budget and on schedule to be completed in the final quarter of this year. 

Productivity improvements in mining are already aligned to the increased concentrator capacity, while the mine’s smelter was also designed to allow for the debottlenecking project, which is expected to lead to a 25 perfect uplift in production from 2022 to around 250 000 ounces. At group level, total PGM production went up 28 percent on the back of a solid production performance from all own-managed mines. Refined production rose 128 percent with the Anglo Converter Plant (ACP) performing ahead of plan.

The mining giant recorded growth in earnings also supported by a 29 percent increase in the PGM basket price to R41 400 per ounce sold from R32 166.

A record EBITDA of R63,3 billion was achieved, representing a 385 percent increase from the same period last year.

Return on capital employed increased to 207 percent and the group closed the period with a net cash position of R57.6 billion. 

Commenting on the performance, group chief executive officer Natascha Viljoen, also highlighted the negative impacts Covid-19 has posed to smooth flow of operations.

She said: “Anglo American Platinum delivered a strong safety, operational and financial performance in H1 2021.

“Such a performance directly benefits our wide range of stakeholders and translates into a larger contribution in taxes, royalties, and procuring from local and doorstep community suppliers, amongst others, of close to R40 billion in the first half of the year. 

“Despite this very significant achievement, the operations have undoubtedly been impacted by the effects of Covid-19, with disruptions to our routines and increased absenteeism due to infected employees in recovery all contributing to an increase in our injury frequency rate.”

Going forward, the group has tightened its PGM production guidance (metal-in-concentrate) from 4,2 million and 4,6 million PGM ounces, to between 4,2 million and 4,4 million PGM ounces, due to lower third-party receipts and the continuing impact of Covid-19 infection rates on production. 

Refined PGM production (excluding tolling) is expected to reach 4,8-5 million ounces. PGM sales volumes are forecast to be in line with refined production.

-The Herald

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