Amplats’ PGMs Output Up in Q4 2018 on Successful Joint Ventures

Anglo American Platinum (Amplats) (LSE:AAL) platinum group metals (PGMs) production rose 3 percent in Q4 2018, thanks to success with its joint ventures (JV) projects and at its Unki mine, the company announced on Thursday (January 24).

The miner produced 1.26 million ounces of PGMs during the fourth quarter of last year, up from the 1.22 million ounces logged in 2017.

“Total PGM production [was] 1,256,900 ounces, [it] increased 3 percent due to improved operational performances particularly at Unki and the JV portfolio,” the company stated in a press release.

“Platinum production increased by 3 percent to 602,300 ounces and palladium production increased by 3 percent to 386,600 ounces,” Amplats added.

The company noted that it achieved very successful JV PGMs production, with output up 6 percent to 281,600 ounces, thanks to to productivity improvements.

Despite being in the green for the end of 2018, the miner did experience a 2 percent decrease at its own managed PGMs mines, with an output of 535,600 ounces. Amplats blamed a decrease in production at its Mogalakwena and Amandelbult mines as the reasons behind the slide.

Mogalakwena PGMs production decreased by 9 percent with an output of 256,800 ounces due to an 8 percent reduction in the built-up head grade. For its part, Amandelbult PGMs production declined by 16 percent, delivering 190,700 ounces due to the repercussions of fatality at the asset in October of last year.

However, the blip was partially offset by a strong performance from Unki and the inclusion of Mototolo as its own mined production.

“Unki had a strong production performance, with PGM production increasing by 36 percent to 49,800 ounces due to a strong operational performance with a 20 percent increase in tonnes milled, 10 percent improvement in recovery and 3 percent improvement in built-up head grade,” Amplats noted.

The company’s purchase of PGMs concentrate from third parties increased by 32 percent to 439,700 ounces, thanks to production bought from the Union mine and the inclusion of all material from the Bafokeng Rasimone platinum mine following its sale.

Refined PGMs production rose by 5 percent to 1.53 million ounces as a result of partially refining the build-up of work-in-progress inventory following scheduled smelter rebuilds and maintenance during the beginning of 2018.

Amplats’ PGMs sales volumes were flat at 1.51-million ounces and last year’s purchased production from Sibanye-Stillwater (NYSE:SBGL,JSE:SGL) equalled 903,900 ounces of PGMs, including 464,100 ounces of platinum and 231,800 ounces of palladium.

However, production guidance is down on 2018 due to the transition of Sibanye material to a tolling arrangement in place of its concentrate being bought.

Looking ahead, Amplats expects its 2019 output, excluding tolling material from Sibanye, to be between 4.2 million and 4.5 million ounces, which includes platinum production of between 2 million to 2.1 million ounces and palladium production of 1.3 million to 1.4 million ounces.

The miner also anticipates that refined production and sales volumes climb this year, as the backlog of work-in-progress inventory will be processed in full for 2019.

As of 11:44 a.m. EST on Thursday, Amplats was down 0.47 percent, trading at GBX 1,792.40.

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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.