29 Apr 2008 07:00
Anglo Platinum Limited29 April 2008 ANGLO PLATINUM QUARTERLY REVIEW AND PRODUCTION REPORT FOR THE PERIOD 1 JANUARY 2008 TO 31 MARCH 2008 HIGHLIGHTS Highlights for the quarter under review include: • The establishment of the Anglo Platinum Kotula Trust to facilitatea broad based employee share participation scheme benefitting some 45,000employees, holding on behalf of its beneficiaries, 2.5 million Anglo Platinumshares representing 1.0% of the Company's issued share capital. • The signature, subject to fulfilment of conditions precedent, ofthe full suite of legal binding agreements for the implementation of theMvelaphanda Resources and Anooraq Resources BEE transactions and submissionthereof to Department of Minerals and Energy for final review. • The approval of the R7.1 billion (R5.9 billion real money terms)expansion of the Twickenham mine in South Africa's Limpopo province, which willincrease production to 250,000 tonnes per month or 180,000 ounces of platinum ayear from 2016. • Full commissioning of the North concentrator at Mogalakwena(formerly Potgietersrust) which produced its first ounces in March 2008. • Rhodium contract sales terms successfully renegotiated. REVIEW OF THE QUARTER Anglo Platinum remains committed to its approach of creating a culture in whichsafety is paramount, with effective learning from safety incidents to ensure 'norepeats'. Anglo Platinum's Enhanced Safety Improvement Plan continues with theobjective of achieving 'zero harm'. Equivalent refined platinum production (equivalent ounces are mined ouncesexpressed as refined ounces) from the mines managed by Anglo Platinum and itsjoint venture partners for the first quarter of 2008 were 517,500 ounces, adecrease of 19% when compared to the first quarter in 2007. The main factorsaffecting production were: • The disruption of operations at the Amandelbult mine as a result ofunderground working areas being inundated by flood water. Dewatering of the minehas proceeded according to plan and Anglo Platinum expects the mine to be backin full production in the second quarter of 2008; • Electricity supply constraints experienced in January and February andthe associated ramp up period when supply resumed. The ongoing impact of theconstrained electricity supply is expected to continue to have some impact onproduction and expansion projects throughout 2008. The full extent of thisimpact cannot be estimated with reasonable accuracy at present; • Higher than planned mining from the lower grade North pit of theMogalakwena mine; • The suspension of operations to rehabilitate shaft steelwork at theTurffontein Shaft of Rustenburg Section. The rehabilitation work on the Shaftwas completed ahead of schedule with first production delivered in March 2008. • Contract labour related work stoppages at Rustenburg Section, Kroondaland Marikana over a 5 day period during the quarter The Kroondal concentrate off-take agreement with Impala was completed, asexpected, in the first quarter of 2008, resulting in increased concentrateounces delivered to the smelters. Repair work at the Polokwane Smelter, as a result of the minor slag run-out, hasbeen completed and normal smelting operations have commenced. Due to AngloPlatinum's excess smelting and refining capacity, the shut down and repairsrequired on the smelter are unlikely to impact on 2008 refined platinumproduction, despite the increase in pipeline stocks in the first quarter of2008. Taking into consideration the factors mentioned above, and the increase inpipeline stocks as a result of the Polokwane and Eskom outages, refined platinumproduction decreased by 24% to 428,600 ounces, compared to the first quarter of2007. Resolution of the main factors which affected production in the first quarter,other than the uncertainty of constrained electricity supply, is likely toresult in an increase in production over the remainder of the year. Accordingly,Anglo Platinum's production forecast for 2008 remains 2.4 million ounces ofrefined platinum. During the quarter Anglo Platinum concluded re-negotiating the terms of itsrhodium sales contracts that impact the portion of sales being made at pricessignificantly below the spot price. As a result of the revised contract terms, the specific details of which aresubject to contractual confidentiality, the price to be received by AngloPlatinum will change during 2008 and 2009. Should the current spot price ofrhodium of $9,000 per ounce, the current rand / US$ exchange rate of 7.80 andrhodium production at the 2007 level of approximately 330,000 ounces remainconstant for the remainder of 2008 and 2009 the impact of the contractre-negotiations will result in an increase in Anglo Platinum's earnings ofapproximately R1.7 billion in 2008 and R3.0 billion in 2009 (earnings impactexamples unaudited). PROJECT PIPELINE Anglo Platinum remains confident of continued robust demand for platinum and iscontinuing with its expansion programme. The rate of expansion is reviewed onan ongoing basis against Anglo Platinum's growth strategy. As part of thisstrategy, Anglo Platinum is focused on increasing production and optimising thevalue of its current operations. In the first quarter of 2008 the Anglo Platinum Board approved the R7.1 billionexpansion of the Twickenham mine to expand current operations on the UG2 reefhorizon. The investment will see the mine, in South Africa's Limpopo province,increase production to 250,000 tonnes per month generating 180,000 ounces ofrefined platinum a year from 2016. The Twickenham project is an integral part ofAnglo Platinum's Eastern Limb (of the Bushveld complex) expansion plans. Theproject will create 5,100 jobs, and most of the new employees will be recruitedfrom the local community and trained at the R283 million Mining Training Centrebeing established at Twickenham. In addition to Twickenham, projects in execution that will increase refinedplatinum production capacity include Mogalakwena North and Amandelbult EastUpper UG2. Johannesburg, South Africa29 April 2008 For further information, please contactTrevor Raymond +27 (0) 11 373-6462, +27 (0) 82 654 8467 Click on the following link to view the associated tables: http://www.rns-pdf.londonstockexchange.com/rns/2916t_-2008-4-28.pdf This information is provided by RNS The company news service from the London Stock Exchange