Anpario Regulatory News (ANP)

28 Jul 2008 08:00

Anglo Platinum

A member of the Anglo American plc group

ABRIDGED INTERIM FINANCIAL RESULTS  for the six months ended 30 june 2008

 

 

  Consolidated Statement OF COMPREHENSIVE INCOME

	Reviewed	Reviewed		Audited
	Six months	Six months		Year
	ended	ended		ended
	30 June	30 June	%	31 December
R millions	2008	2007	Change	2007
Gross sales revenue	27 559	23 646		46 961
Mined	22 159	20 933		40 749
Purchased metals in concentrate	5 400	2 713		6 212
Commissions paid	(189)	(179)		(345)
	---------	---------		---------
Net sales revenue	27 370	23 467	17	46 616
COST OF SALES	(16 081)	(12 654)	(27)	(27 519)
	---------	---------		---------
GROSS PROFIT ON METAL SALES	11 289	10 813	4	19 097
Mined	11 354	10 542		18 470
Purchased metals	(65)	271		627
Other net income/(expenditure)	365	(114)		(119)
Market development and promotional expenditure	(195)	(151)		(324)
	---------	---------		---------
Operating profit	11 459	10 548	9	18 654
Interest expensed	(67)	(140)		(182)
Interest received	130	279		403
Net income from associates	77	322		448
	---------	---------		---------
Profit before taxation	11 599	11 009	5	19 323
Taxation	(2 749)	(3 938)	30	(6 656)
	---------	---------		---------
profit FOR THE period/year	8 850	7 071	25	12 667
OTHER COMPREHENSIVE INCOME
Deferred foreign exchange translation losses	-	-		(57)
	---------	---------		---------
TOTAL COMPREHENSIVE INCOME FOR THE period/year	8 850	7 071		12 610
	---------	---------		---------

  

Profit attributable to:
Minority interest	450	171		337
Owners of the Company	8 400	6 900	22	12 330
	---------	---------		---------
	8 850	7 071		12 667
	---------	---------		---------
Total comprehensive income attributable to:
Minority interest	450	171		337
Owners of the Company	8 400	6 900		12 273
	---------	---------		---------
	8 850	7 071		12 610
	---------	---------		---------
Reconciliation between profit and headline earnings
Profit attributable to owners of the Company	8 400	6 900		12 330
Less: Declared and undeclared cumulative preference share dividends and related STC	(4)	(7)		(15)
Less: Deemed dividend to preference shareholders  (Note 8)	(5)	(16)		(16)
	---------	---------		---------
Basic earnings attributable to ordinary shareholders	8 391	6 877		12 299
Adjustments:
Loss/(profit) on disposal and scrapping of property, plant and equipment	54	(4)		(7)
Tax effect of adjustments	(15)	1		2
	---------	---------		---------

  

Headline earnings attributable to ordinary shareholders	8 430	6 874	23	12 294
Add: Declared and undeclared cumulative preference share dividends and related STC	4	7		15
Add: Deemed dividend to preference shareholders  (Note 8)	5	16		16
	---------	---------		---------
Headline earnings	8 439	6 897		12 325
	---------	---------		---------
Number of ordinary shares in issue (millions)	237.0	236.0		236.4
Weighted average number of ordinary shares in issue (millions)	236.6	233.6		234.7
Attributable earnings per ordinary share (cents)
- Basic	3 547	2 944	21	5 241
- Diluted	3 531	2 926	21	5 203
Attributable headline earnings per ordinary share (cents)
- Headline	3 563	2 943	21	5 239
- Diluted	3 548	2 925	21	5 201
Dividends per ordinary share (cents)	3 500	2 900	21	5 200
- Interim	3 500*	2 900		2 900
- Final				2 300
Dividends per preference share (cents)	320	318		638
Dividend cover per ordinary share (headline earnings)	1.0	1.0		1.0

* Proposed ordinary dividend

  consolidated statement of financial position

	Reviewed	Reviewed	Audited
	as at	as at	as at
	30 June	30 June	31 December
R millions	2008	2007	2007
ASSETS
Non-current assets	40 970	34 434	36 964
Property, plant and equipment	21 282	20 485	20 697
Capital work-in-progress	18 961	12 730	15 561
Investment in associates	463	1 022	391
Investments held by environmental trusts	67	-	120
Other financial assets	120	115	116
Other non-current assets	77	82	79
Current assets	19 283	13 999	14 832
Inventories	8 996	5 793	6 370
Accounts receivable	5 653	4 216	4 246
Other assets	166	260	134
Derivative financial assets	2	-	3
Cash and cash equivalents	4 466	3 730	4 079
Assets classified as held for sale	2 720	-	2 254
	---------	---------	---------
Total assets	62 973	48 433	54 050
	---------	---------	---------
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital - ordinary and preference	24	24	24
Share premium - ordinary and preference	9 368	9 268	9 295
Accumulated profits before proposed dividends and related Secondary Tax on Companies (STC)	21 939	20 398	18 988
Accumulated profits after proposed  dividends and related STC	12 915	12 802	13 111
Proposed ordinary dividend and related STC	9 023	7 594	5 876
Undeclared cumulative preference share dividend and related STC	1	2	1
Minority shareholders' interest	676	453	466
	---------	---------	---------

  

Total equity	32 007	30 143	28 773
Non-current liabilities	11 144	9 196	10 108
Deferred taxation	9 749	8 098	8 748
Environmental obligations	884	569	840
Employees' service benefit obligations	13	25	24
Share based payment provision	-	23	6
Obligations due under finance leases	498	481	490
Current liabilities	18 794	9 094	14 012
Interest-bearing borrowings	9 604	600	7 465
Accounts payable	5 967	4 333	3 508
Other liabilities	2 043	1 778	2 212
Share based payment provision	429	512	474
Taxation	751	1 871	353
Liabilities directly associated with assets classified as held for sale	1 028	-	1 157
	---------	---------	---------
Total equity and liabilities	62 973	48 433	54 050
	---------	---------	---------

  consolidated statement of changes in equity

	Share	Share	Accumulated	Minority
R millions	capital	premium	profits	interests	Total
Balance as at  31 December 2006 (audited)	23	5 568	22 590	511	28 692
Total comprehensive income for the period			6 900	171	7 071
Dividend paid to minorities				(229)	(229)
Ordinary and preference dividends paid	1	3 627	(9 048)		(5 420)
Paid in cash			(5 420)		(5 420)
Dividends reinvested	1	3 627	(3 628)		-
Ordinary share capital issued	-*	73			73
Equity-settled share based compensation			(44)		(44)
	---------	---------	---------	---------	---------
Balance as at  30 June 2007 (reviewed)	24	9 268	20 398	453	30 143
Total comprehensive income for the period			5 373	166	5 539
Dividend paid to minorities				(153)	(153)
Ordinary and preference dividends paid			(6 856)		(6 856)
Unclaimed dividends			-*		-*
Ordinary share capital issued	-*	780			780
Conversion of preference shares	-*	(753)			(753)
Equity-settled share based compensation			101		101
Shares issued to employees			(28)		(28)
	---------	---------	---------	---------	---------

  

Balance as at  31 December 2007 (audited)	24	9 295	18 988	466	28 773
Total comprehensive income for the period			8 400	450	8 850
Dividend paid to minorities				(240)	(240)
Ordinary and preference dividends paid			(5 448)		(5 448)
Ordinary share capital issued	-*	166			166
Conversion of preference shares	-*	(93)			(93)
Equity-settled share based compensation			42		42
Shares issued to employees			(43)		(43)
	---------	---------	---------	---------	---------
Balance as at  30 June 2008 (reviewed)	24	9 368	21 939	676	32 007
	---------	---------	---------	---------	---------

* Less than R500 000

  Consolidated statement of Cash Flows

	Reviewed	Reviewed	Audited
	Six months	Six months	Year
	ended	ended	ended
	30 June	30 June	31 December
R millions	2008	2007	2007
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from customers	26 818	23 518	46 380
Cash paid to suppliers and employees	(15 559)	(11 689)	(25 715)
	---------	---------	---------
Cash from operations	11 259	11 829	20 665
Interest (paid)/received (net of interest capitalised)	(40)	(79)	5
Taxation paid	(1 244)	(3 729)	(6 821)
	---------	---------	---------
Net cash from operating activities	9 975	8 021	13 849
	---------	---------	---------
CASH FLOWS USED IN INVESTING ACTIVITIES
Purchase of property, plant and equipment (including interest capitalised)	(5 810)	(4 653)	(10 653)
To maintain operations	(2 079)	(1 534)	(5 137)
To expand operationss	(3 286)	(3 068)	(5 241)
Interest capitalised	(445)	(51)	(275)
Proceeds from sale of plant and equipment	3	-	81
Investment in associates	-	-	(11)
(Increase)/decrease in investments held by environmental trusts	(2)	32	(120)
Interest received	113	268	379
Growth in environmental trusts	17	11	24
Dividends received	77	130	279
Other	-	10	-
	---------	---------	---------
Net cash used in investing activities	(5 602)	(4 202)	(10 021)
	---------	---------	---------
CASH FLOWS USED IN FINANCING ACTIVITIES
Proceeds from the issue of ordinary share capital	73	73	100
Raising of current interest-bearing borrowings	2 201	500	7 575
Distributions to minority shareholders	(240)	(229)	(382)
Ordinary and preference dividends paid, net of reinvestment	(5 448)	(5 421)	(12 276)
	---------	---------	---------

  

Net cash used in financing activities	(3 414)	(5 077)	(4 983)
	---------	---------	---------
Net increase/(decrease) in cash and cash equivalents	959	(1 258)	(1 155)
Cash and cash equivalents at beginning of period/year	4 079	4 988	4 988
Transfer to assets held for sale	(572)	-	246
	---------	---------	---------
Cash and cash equivalents at end of period/year	4 466	3 730	4 079
	---------	---------	---------
MOVEMENT IN NET (DEBT)/CASH
Net (debt)/cash at beginning of period/year	(3 876)	4 413	4 413
Net cash from operating activities	9 975	8 021	13 849
Net cash used in investing activities	(5 602)	(4 202)	(10 021)
Other	(6 133)	(5 583)	(12 117)
	---------	---------	---------
Net (debt)/cash at end of period/year	(5 636)	2 649	(3 876)
	---------	---------	---------
Made up as follows:
Cash and cash equivalents	4 466	3 730	4 079
Interest-bearing borrowings	(9 604)	(600)	(7 465)
Oblligations due under finance leases	(498)	(481)	(490)
	---------	---------	---------
	(5 636)	2 649	(3 876)
	---------	---------	---------

  Notes to the interim results

1. This interim report complies with International Accounting Standard 34 - Interim Financial Reporting and South African Statement of Generally Accepted Accounting Practice, AC127, with the same title, as well as with Schedule 4 of the South African Companies Act and the disclosure requirements of the JSE Limited's listings requirements.

2. The interim report has been prepared using accounting policies that comply with International Financial Reporting Standards and South African Statements of Generally Accepted Accounting Practice. The accounting policies are consistent with those applied in the financial statements for the year ended 31 December 2007, except for the changes described in note 3.

3. New accounting policies adopted

Amendment to IAS 1 - Presentation of Financial Statements

On 1 January 2008, the Group early adopted the disclosure requirements for presentation of financial statements and the consequential amendments to IAS 34. This standard affects the presentation of owner changes in equity and of comprehensive income and does not impact on recognition, measurement and disclosure of specific transactions as required by any other IFRSs. The Group has presented a "statement of comprehensive income" which replaces the income statement and also includes all non-owner changes in equity. All changes in equity resulting from transactions with owners in their capacity as owners are presented in the "statement of changes in equity".

IFRIC 12 - Service Concessions

On 1 January 2008, the Group adopted IFRIC 12 - Service Concession Arrangements. This interpretation provides guidance to assist users in interpreting how IASB literature is to be applied to arrangements where governments or other bodies grant contracts for the supply of public services to private entities. This had no impact on the financial results of the Group for the period.

IFRIC 13 - Customer Loyalty Programmes

On 1 January 2008, the Group early adopted IFRIC 13 - Customer Loyalty Programmes. This interpretation addresses accounting by entities that grant loyalty award credits to customers who buy other goods or services. This had no impact on the financial results of the Group for the period.

IFRIC 14, IAS 19 - The Limit of a Defined Benefit Asset, Minimum Funding Requirements and their Interaction

On 1 January 2008, the Group adopted IFRIC 14, IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction. IFRIC 14 addresses the interaction between a minimum funding requirement and the limit placed by paragraph 58 of IAS 19 on the measurement of the defined benefit asset or liability. This did not have any impact on the financial results of the Group for the period.

  IFRS 2 - Share based payment - Amendment relating to vesting conditions and cancellations

On 1 January 2008, the Group early adopted the amendment of IFRS 2. The amendment clarifies that the only vesting conditions are service conditions and performance conditions. Other features of a share-based payment are not vesting conditions. Consequently, under IFRS 2, features of a share-based payment that are not vesting conditions should be included in the grant date fair value of the share-based payment. The fair value also includes market-related vesting conditions.

In addition, all cancellations, irrespective of the party cancelling, should receive the same accounting treatment. Under IFRS 2, a cancellation of equity instruments is accounted for as an acceleration of the vesting period. Therefore any amount unrecognised that would otherwise have been charged is recognised immediately. Any payments made with the cancellation (up to the fair value of the equity instruments) are accounted for as the repurchase of an equity interest. Any payment in excess of the fair value of the equity instruments granted is recognised as an expense. The adoption of these amendments has not had a material impact on the Group's financial results for the period.

	Reviewed	Reviewed	Audited
	Six months	Six months	Year
	ended	ended	ended
	30 June	30 June	31 December
	2008	2007	2007
	%	%	%
4. Taxation
A reconciliation of the standard rate of South African normal
taxation compared with that charged in profit/loss is set out
in the following table:
South African normal tax rate	28.0	29.0	29.0
STC	0.9	8.6	8.7
	---------	---------	---------
	28.9	37.6	37.7
Foreign income	(3.3)	(2.9)	(3.3)
Exempt income	(0.2)	(0.8)	-
Prior year overprovision	-	-	(0.1)
State's share of profits	0.5	1.2	-
Change in corporate tax rate	(2.8)	-	-
Other	0.6	0.7	0.1
	---------	---------	---------
Effective tax rate	23.7	35.8	34.4
	---------	---------	---------

  

	R millions	R millions	R millions
5. Commitments
Mining and process property, plant and equipment
Contracted for	5 042	3 776	4 224
Not yet contracted for	19 991	15 751	13 085
	---------	---------	---------
Authorised by the directors	25 033	19 527	17 309
	---------	---------	---------
Allocated for:
Expansion of capacity	14 800	10 619	6 281
- within remainder of year/one year	6 275	5 319	4 370
- thereafter	8 525	5 300	1 911
Maintenance of capacity	10 233	8 908	11 028
- within remainder of year/one year	6 836	4 417	5 787
- thereafter	3 397	4 491	5 241
Other
Operating lease rentals - buildings	604	469	575
- within remainder of year/one year	87	30	47
- within two to five years	252	158	213
- thereafter	265	281	315
Information Technology Service Providers	500	620	569
- within remainder of year/one year	93	153	147
- thereafter	407	467	422

These commitments will be funded from existing cash resources, future operating cash flows, borrowings and any other funding strategies embarked on by the Group.

6. Contingent liabilities

Letters of comfort have been issued to financial institutions to cover certain banking facilities. There are no encumbrances over Group assets, other than houses held under finance leases by the Group.

Aquarius Platinum (South Africa) (Proprietary) Limited holds an option to put its interest in the Kroondal pooling and sharing arrangement to the Group in the case of termination of that relationship. The probability of the option being exercised is considered remote. The amount of such an obligation is dependent on a discounted cash flow valuation of its interest at that point in time.

The Group has, in the case of some of its mines, provided the Department of Minerals and Energy with guarantees that cover the difference between the closure costs and amounts held in the environmental trusts. At 30 June 2008, these guarantees amounted to R1 990 million (30 June 2007: R453 million, 31 December 2007: R1 939 million).

The Group is the subject of various claims, the expected outcomes of which are varied, but on a probability weighting the amount is estimated at R76 million (30 June 2007: R8 million, 31 December 2007: R70 million). 

The Group has provided Lexshell 36 General Trading (Pty) Limited, a company indirectly owned by the Bakgatla-Ba-Kgafela traditional community, with a facility that covers their minimum debt repayments should the company not be able to meet its repayments. The facility is limited to Union Section's cash flows, and call on this facility is considered a remote possibility.

Rustenburg Platinum Mines Limited (RPM) has granted a R2 billion loan facility to Royal Bafokeng Resources (Pty) Limited (RBR) for the purpose of funding its contributions to the BRPM joint venture. The loan is repayable in full on 11 August 2012. The RBR has ceded and pledged its interest in the BRPM joint venture to RPM as security for the loan. RPM also has the right to register a notarial bond and a mortgage bond over RBR's undivided share of the assets of the BRPM joint venture.

7. Change in accounting estimate

Metal inventories

During the year, the Group changed its estimate of the quantities of inventory based on the outcome of a physical count of in-process metals. The Group runs a theoretical metal inventory system based on inputs, the results of previous physical counts and outputs. Due to the nature of in-process inventories being contained in weirs, pipes and other vessels, physical counts only take place once per annum. This change in estimate has had the effect of increasing the value of inventory disclosed in the financial statements by R200 million (2007: R148 million). This results in the recognition of an after tax gain of R144 million (2007: R105 million). The amount of the effect of future periods has not been disclosed because estimation is impractible.

8. Revision of conversion price applicable to convertible preference shares

As the dividend cover in respect of the 2007 dividend was less than 1.4 times, it was necessary, in accordance with the rights and privileges attaching to the convertible perpetual cumulative preference shares ("convertible preference shares"), to amend the conversion price to be used when the convertible preference shares are converted into ordinary shares. The conversion price was R284.24 or 35.18154 ordinary shares for each 100 convertible preference shares converted. Based on the volume weighted average traded price of Anglo Platinum ordinary shares on the JSE Limited for the five business days ended Friday, 7 March 2008 of R1 299.15, the conversion price was amended to R281.05 or 35.58086 shares for every 100 convertible preference shares converted.

This decrease in the conversion price has resulted in a deemed dividend for the purpose of calculating earnings per share in terms of IAS 33 - Earnings per share to the outstanding preference shareholders at the date of the adjustment. Consequently, this deemed dividend of R3.19 per convertible preference share, amounting to R5 million has been taken into account when calculating the basic earnings attributable to ordinary shareholders. This amount has been included with the preference dividends due to the preference shareholders of R4 million in the total amount attributable to preference shareholders.

  9. Assets held for sale (BEE transactions)

Disposal of investment in associate - Northam and disposal of 50% interest in Booysendal joint venture

On 3 March 2008 binding agreements were signed for the disposal of Anglo Platinum's 22.3% interest in Northam and its 50% stake in the Booysendal project to Mvelaphanda Resources Limited ("Mvelaphanda") for a cash consideration of some R4 billion. This transaction will become effective shortly after all remaining approvals have been obtained, which effective date is expected to be during the second half of 2008. When the transaction becomes effective, Anglo Platinum's call option over Mvelaphanda's 16.95% interest in Northam will have fallen away.

Disposal of 51% in Lebowa Platinum Mines and 1% interest in Ga-Phasha, Boikgantsho and Kwanda joint ventures

In September 2007, the board approved the disposal of 51% in Lebowa Platinum Mines and a 1% interest in Ga-Phasha, Boikgantsho and Kwanda joint ventures, to Anooraq Resources Corporation ("Anooraq") for a cash consideration of R3.6 billion. Legal agreements were signed in March 2008 and are subject to the fulfilment of various conditions precedent. Several of the conditions precedent have subsequently been met and the remaining conditions are primarily regulatory in nature. Anooraq has made good progress in its fund raising process by virtue of the conditional exercise of BEE warrants by Pelawan Investments (Pty) Limited in December 2007, raising some R1.6 billion as well as procuring debt funding from Standard Chartered Bank for some R2.2 billion. The transaction is expected to be effective by the end of 2008.

10. Implementation of the Kotula Trust

The shareholders of the company approved the implementation of the Group Employee Share Participation Scheme ("the scheme") at a combined general meeting on 31 March 2008. The conditions precedent were subsequently met and the scheme was implemented on 16 May 2008. The Kotula Trust, which was established to facilitate the scheme on behalf of the beneficiaries, was issued with 1 008 519 ordinary shares and 1 512 780 "A" ordinary shares. The Kotula Trust is consolidated by the Group. As the scheme is equity settled, the IFRS 2 - Share based payments charge determined on grant date, i.e. 16 May 2008 amounted to R1 954 million. This change is being spread over the seven year vesting period of the scheme taking into consideration the various tranches vesting in 2013, 2014 and 2015.

  11. Contingent asset

Amandelbult insurance claim

Due to a flash flood on 21 January 2008, the water inflow from the storm together with the water inflows from several days of abnormal rainfall, exceeded the installed dewatering capacity of the Amandelbult number 1 vertical shaft and resulted in the flooding of the shaft bottom including the pump station. This was recorded as a 1:200 year event. Production after the flood event was reduced to around 25% of normal output. An emergency dewatering program was implemented to return the shaft to normal production levels as soon as possible. The insurers were immediately advised and Anglo Platinum has submitted a material damage claim together with the business interruption claim for the period during which the mine was not at full capacity. However, the quantum claimable in respect of the business interruption claim under this policy can only be determined once the indemnity period of 24 months has lapsed. The final quantum of the claim is dependent on a number of variables which can only be determined during or at the end of the 24 month indemnity period. Consequently, no compensation for lost revenue in respect of the business interruption claim has been recorded due to the uncertainty around the quantum of the claim.

12. Comparative figures

Amounts included in cash investments held by environmental trusts of R296 million at 30 June 2007 that meet the definition of cash and cash equivalents have been reclassified from non-current assets to cash and cash equivalents. The cash flow statement has been amended accordingly.

13. Corporate governance

The Board is of the view that the Company and its subsidiaries are compliant with the recommendations as set out in the Code of Corporate Practices and Conduct contained in King 2.

14. Auditors' review

The interim report from which the abridged interim results have been extracted has been reviewed by the Company's auditors, Deloitte & Touche. Their unqualified review report is available for inspection at the Company's registered office. 

  Commentary

1. Financial results

Anglo Platinum achieved record earnings for the six months ended 30 June 2008. Headline earnings of R8.44 billion were 22% higher than the same period in 2007. Factors contributing to the increase were higher US dollar prices realised on metals sold, which at a basket price of US$3,115 per platinum ounce represents a 19% increase over 2007, a rand/US dollar exchange rate that was on average 8% weaker in the period under review as well as a lower effective tax rate which reduced from 35.8% to 23.7%. These were offset by lower sales volumes on the back of reduced production from mining and processing operations, higher operating costs and a significant increase in the cost of purchasing metal from joint venture partners, resulting from a volume increase and the increase in contained metal prices. Headline earnings per ordinary share increased 21% to 3,563 cents. An interim dividend of 3,500 cents per ordinary share has been declared, maintaining a dividend cover of one. 

Gross sales revenue increased by R3.91 billion to R27.6 billion. The increase was the result of higher US dollar metal prices achieved, contributing R6.50 billion of the increase and a weaker average rand/US dollar exchange rate of R7.70, compared to R7.16 achieved in 2007, increasing revenue by R1.92 billion. This was offset by lower volumes of metals sold, which reduced revenue by R4.50 billion. To ensure that Anglo Platinum met contractual delivery of refined platinum to its customers some 111,000 ounces were sold from normal working levels of refined stock resulting in refined platinum sales for the six months ended 30 June 2008 of 1.11 million ounces.

Strong demand together with constrained supply to the market by major producers resulted in Anglo Platinum achieving significantly higher US dollar prices on its sales. The average prices achieved on platinum, palladium and nickel sales for the half year were US$1,906 per ounce, US$436 per ounce and US$12.14 per pound respectively. The contract sales terms for rhodium were successfully renegotiated in the first quarter of 2008. As a result of the revised contract terms, the specific details of which are subject to contractual confidentiality, the sales price of rhodium will move closer towards market prices during 2008 and 2009. Consequently the average price achieved on rhodium sales in the first six months of 2008 increased to US$5,833 per ounce.

Cost of sales increased by R3.43 billion to R16.1 billion as a result of:

• The cost of purchases of metal increased to R6.12 billion. Higher metal prices and the terms governing purchasing agreements contributed R2.40 billion of the variance while an increase in the volume of metals purchased resulted in an additional cost of R919 million. Leasing of palladium metal was required to meet contractual commitments at an actual leasing cost of R1.7 million. The volumes leased resulted in an increase in the liability for leased metal of R349 million when marked to market;

• Cash mining, smelting and refining costs rose 17% to R9.95 billion with the cash operating cost per equivalent refined platinum ounce rising by 46% to R10,498. The increase in unit costs is attributable primarily to reduced production and expected lower grades than achieved in the strong first half of 2007, intensified by above inflationary pressures experienced in key input costs including labour, diesel, chemicals, steel grinding media, explosives and cement;

• Depreciation increased by 9% to R1.47 billion as a result of the capital expenditure programme and increased utilisation of new operating assets;

• The net value of metals in inventory increased by R2.54 billion in the first half of 2008. This is attributed to an increase in pipeline stocks, associated with smelter outages, and an increase in the value of metal in stock as a result of the increase in the cost at which metal inventories are valued which includes the impact of higher costs in respect of the purchase of metals, offset by a reduction in refined metal stocks; and

• Other costs increased by R318 million to R1.08 billion. An adjustment for share based payments costs of R215 million in the first half of 2007 has resulted in the 2008 share based payments costs being comparatively higher. 

The Group's taxation charge decreased to R2.75 billion reflecting a reduction in the effective tax rate from 35.8% in the first half of 2007 to 23.7% in 2008. The reduction comprises:

• The reduction in the South African company tax rate from 29% to 28% (R92 million);

• Revaluation of the deferred tax liability due to the above change (R317 million);

• Reduced secondary tax on companies ("STC") on the lower 2007 final dividend paid  (R295 million);

• Reduction in the South African STC rate from 12.5% to 10.0% (R183 million); and

• The election of an STC exemption in respect of the 2007 final dividend paid to Anglo American (R339 million). 

The Group's net debt position at 30 June 2008 amounted to R5.64 billion, compared to the  R3.88 billion net debt position at 31 December 2007.

2. Safety

Anglo Platinum's focus on safety, based on zero harm and a change in safety culture, has resulted in an improvement in safety performance across the operations. In the first half of 2008 the lost time injury frequency rate improved significantly to 1.96 from 2.37 in the first half of 2007. 

Regrettably eight employees lost their lives at Anglo Platinum's managed operations in the first half of 2008. Whilst this is a marked reduction from the 18 fatalities for the same period in 2007, these fatalities remain of great concern. 

A number of operations achieved significant milestones during the first half of 2008 in respect of safety, most notably:

• Union mine achieved five million fatality free shifts and 10 million 'fall of ground' fatality free shifts;

• Mortimer smelter has operated for three years without a single lost time injury; and

• Mogalakwena and Lebowa mining operations have operated for five years and one year respectively without a fatality. 

Lessons learnt from these operations are being shared across Anglo Platinum to enhance the safety improvement programme and improve the overall safety performance. 

3. Operations

Equivalent refined platinum production (equivalent ounces are mined ounces expressed as refined ounces) from the mines managed by Anglo Platinum and its joint venture partners for the first half of 2008 were 1,128,200 ounces, a decrease of 11%, or 145,800 ounces when compared to the first half of 2007. Factors contributing to the decrease include:

• The disruption of operations at the Amandelbult mine as a result of underground working areas being flooded. Production has now been restored; 

• Lower throughput at the Mogalakwena South concentrator; 

• The suspension of operations to rehabilitate shaft steelwork at the Turffontein shaft of Rustenburg mine. 

• An overall expected reduction in built-up head grade; and 

• Severe electricity supply constraints in January and the associated ramp-up period when supply resumed.

Mining operations

Performance at operations is summarised below: 

• Rustenburg: The mine produced 282,600 equivalent refined platinum ounces, 27% or 107,100 ounces less than that reported for the same period in 2007. The reasons for the decreased performance were lower expected built-up head grades, Turffontein shaft closure for shaft rehabilitation work, unexpected contractor strikes, skilled labour shortages and safety stoppages.

• Amandelbult: Equivalent refined platinum production decreased by 91,100 ounces to 195,200 ounces. The decrease in ounces is principally due to a major flood event. Production has now been restored. The planned increases in UG2 mining has resulted in the 4E built-up head grade reducing by 8% to 4.81g/t. 

• Union: Union performed well with equivalent refined platinum production of 152,700 ounces, meeting expectations.

• Mogalakwena: The mine produced 71,800 equivalent refined platinum ounces for the first half of 2008. This was 19% below the same period in 2007. The unexpected high number of breakdowns and a safety stoppage, following a fatality at the South concentrator resulted in lower milled throughput. This, combined with the planned lower grades at the existing Sandsloot and Zwartfontein South pits, reduced platinum output by 33,400 equivalent refined ounces. This loss was offset by the new Mogalakwena North concentrator, delivering its first production in 2008, producing some 17,000 equivalent refined ounces. From current indications the combined output from the existing Sandsloot and Zwartfontein South pits is likely to remain at approximately 150,000 ounces per year in 2008 and 2009. Total refined platinum production at Mogalakwena in 2008 is expected to be 190,000 ounces.

• Kroondal: Equivalent refined platinum production from the Kroondal joint venture increased by 42% to 92,500 ounces. The sale of 7,700 ounces to Impala Platinum in the first quarter in terms of the Aquarius off-take agreement marked its conclusion resulting in the expected increase in production attributable to Anglo Platinum.

• Bafokeng-Rasimone: Equivalent refined platinum production decreased to 85,500 ounces, 15% lower than that reported for the first half of 2007. The decrease was due to high absenteeism, skilled labour shortages and safety related stoppages.

• Modikwa: Exceptional performance from Modikwa resulted in equivalent refined platinum production increasing by 27% to 65,800 ounces.

• Mototolo: The joint venture maintained its output level in the first six months of 2008 contributing 42,800 ounces of equivalent refined platinum production. 

• Lebowa: Equivalent refined platinum production decreased by 17% to 40,100 ounces. This lower output was due to safety stoppages and labour related issues. 

• Marikana: Equivalent refined platinum production attributable to Anglo Platinum increased by 81% to 14,500 ounces. Marikana remains in ramp-up and is expected to continue increasing production towards its steady state production level of 74,000 equivalent refined platinum ounces in 2009. 

• Twickenham: The mine produced 3,700 equivalent refined platinum ounces in the first half of 2008. 

The first half of 2008 saw an increase in purchased ounces from the new Eland Platinum mine which commenced delivery to Anglo Platinum in December 2007.

Process operations

Concentrator operations performed well during the first half of 2008 and the ongoing optimisation of concentrator recoveries assisted in offsetting the lower recovery potential associated with the planned increase in UG2 and Platreef volumes. Concentrators were operated to match mining volumes. 

In order to meet the Eskom requirement of a 10% reduction in electricity usage, Anglo Platinum mining and concentrating operations were operated at as high a level as possible. This was achieved by selectively reducing power to other major loads, the most significant of which are smelters. This has increased the thermal cycling of smelters and is believed to be a factor contributing to the increased frequency of smelter run-out failures.

Three such failures occurred during the first half of 2008 at Polokwane in February and at the Waterval slag cleaning furnace in May and June. The failures together with the scheduled re-build of the Mortimer smelter resulted in a significant build-up of pipeline stock.

To ameliorate the effects of ongoing thermal cycling and given that Anglo Platinum's smelting capacity exceeds current requirements, the slag cleaning furnace and number two furnace at the Waterval complex will be shut down for lining replacements. Pipeline stocks will continue to build-up in the third quarter but will reduce by year-end.

Refining operations performed well over the period.

Smelting and refining cash costs per refined platinum ounce increased by 24% when compared to the same period last year due to lower economies of scale and additional maintenance and repair costs incurred.

The factors mentioned above have contributed to reduced production of refined platinum, which at 1,001,100 ounces for the first half of 2008 represents a decrease of 16% when compared to the same period in 2007. 

4. Projects

Anglo Platinum remains confident of continued robust demand for platinum and is continuing with its expansion programme. In the first half of 2008 the Board approved projects totalling R24.8 billion, in nominal terms. These approvals include:

• R16.0 billion Amandelbult Number 4 Shaft: The project will replace 271,000 ounces of refined platinum per annum from 2019. The Project will co-extract the Merensky and UG2 reefs and will partially replace diminishing Merensky reserves whilst providing a moderate increase in UG2 production. The lengthy process of shaft sinking and build up to steady state volumes results in an overall project duration of 12 years. The R16 billion (R11.7 billion in 2008 money terms) capital cost will be spent over this 12 year period;

• R7.1 billion Twickenham Platinum Mine: At steady state will contribute an additional 180,000 ounces of refined platinum from 2016. The project will expand current operations and exploit the UG2 reef horizon;

• R1.0 billion number 2 slag cleaning furnace: This project will double the existing Waterval Converter Slag smelting capacity during 2010. The increased capacity requirement is a direct result of Anglo Platinum's expansion strategy and the requirement to maintain current recoveries; and

• R0.7 billion MC Plant capacity expansion: Phase 1 of the project will increase the current  MC Plant capacity from 64ktpa Waterval Converter Matte to 75ktpa during 2009.

The following major projects are progressing: 

• The R1.0 billion Rustenburg Townlands Ore Replacement project will contribute 70,000 refined platinum ounces per annum from 2014 with production expected from the new Merensky and UG2 areas;

• R1.9 billion Base Metals Refinery project to expand the capacity of the existing plant to 33ktpa of contained nickel to deliver by the end of 2010;

• R1.5 billion Amandelbult East Upper UG2 project, which will contribute an additional 100,000 ounces of refined platinum per annum by 2012; 

• R1.4 billion Mainstream Inert Grind projects approved in November 2007 to improve mineral liberation and PGM recovery are on schedule with the exception of the Bafokeng-Rasimone project which had a late start due to a constraint in engineering and project management resources; 

• The R2.3 billion Rustenburg Paardekraal 2 shaft replacement project to produce 120,000 ounces of refined platinum per annum by 2015; and

• Development of the Unki Mine in Zimbabwe continues as planned.

The 64 kilometre effluent water pipeline from Polokwane to the Mogalakwena mine was successfully commissioned. The expansion of the Eastern Limb water supply to Mototolo was also completed. These projects also provide base infrastructure which can expand to support future mine development. 

5. Capital expenditure in 2008

Total capital expenditure amounted to R5.81 billion, an increase of R1.16 billion over the comparable period in 2007. Expansion expenditure was R3.29 billion with expenditure to maintain operations at R2.08 billion. Capitalised interest amounted to R445 million.

The strong global demand for resources continues to place material inflationary pressure on capital expenditure and the ability to meet project schedules. These pressures are likely to continue in the foreseeable future.

Anglo Platinum expects full year capital expenditure for 2008 to be between R12 billion and R13 billion as a result of cost pressures and change of scope requirements, including emergency generators.

6. Communities

The relocation of the Ga-Puka and Ga-Sekhaolelo communities (the Motlhohlo community), which commenced in July 2007 has made significant progress since last reported. To date some 865 of the 956 families have relocated to the new villages. The new villages are supported by 52 community facilities such as schools, clinics, shops, crèches and churches. The relocations are being conducted in line with World Bank resettlement guidelines. Anglo Platinum has taken care to ensure that resettled communities are left better off after resettlement than they were before. In this regard, Anglo Platinum has provided the communities with quality housing, facilities and crop and grazing fields. In addition Anglo Platinum has provided funding for community trusts to ensure that benefits flow to these communities to assist them in building sustainable development in areas such as infrastructure, education, health and enterprise.

In March 2008, Action Aid, an international NGO, published a report; "Precious Metals, the impact of Platinum mining on poor communities". The report was submitted to the South African Human Rights Commission ("SAHRC") to investigate the allegations against Anglo Platinum. Two editions of a rebuttal document, "The Facts", providing facts to refute Action Aid allegations were issued by Anglo Platinum. The SAHRC is currently carrying on an investigation into the allegations and Anglo Platinum has provided the SAHRC with all requested information and are expecting a report to be issued in August 2008. 

Following the Action Aid report Anglo Platinum has experienced increased activism in the communities. The Benchmarks Foundation, a South African NGO, published a report in May 2008 similar in focus to the Action Aid report. However, it highlighted areas where they believed Anglo Platinum's community engagement process excelled including for example the high level of transparency in reporting on community engagement and safety.

7. Minerals legislation and transformation

Anglo Platinum has made significant progress in its transformation programme.

The Anglo Platinum Kotula Trust, a R3.0 billion broad-based employee share ownership scheme that will benefit some 46,000 employees, was launched in June 2008 and is now fully operational. The scheme represents the largest ownership transaction in the mining industry in terms of value and number of beneficiaries facilitating broad-based employee share participation. 

During this period legal agreements relating to the previously announced Anooraq Resources and Mvela Resources transactions were completed and signed. It is anticipated that the Mvela Resources transaction will be effective shortly, and the Anooraq transaction implementation will take place in the second half of 2008 following completion of the funding arrangements.

Satisfactory progress continues to be made on all other aspects of the mining charter, details of which will be included in our annual sustainability report.

Anglo Platinum has received conversion of its mining rights as announced on 29 April 2008 and is progressing the applications relating to the Bafokeng-Rasimone and Modikwa joint ventures.

8. Dividends

Ordinary dividends are declared after consideration of current and future funding requirements and are paid out of cash generated from operations.

The Board has declared an interim ordinary dividend of 3,500 cents per share resulting in a dividend cover of one on half-year headline earnings. A preference dividend of 320 cents per preference share was paid in June 2008.

9. Market outlook

Adverse macroeconomic developments in the US and potentially in Europe, the South African electricity constraints and rapidly rising global inflationary trends have injected uncertainty into the PGM markets. 

High platinum prices will continue to be supported by lower than anticipated supplies from South Africa, the weak US dollar and investment demand.

Platinum auto and industrial demand remains firm with the switch to smaller cars in the US impacting palladium more than platinum. Automobile growth in emerging markets continues, offsetting some of the weakness in the major markets.

Consistently high prices coupled with severe price volatility this year have reduced confidence in platinum jewellery at the trade level despite strong consumer demand in China being increasingly satisfied by higher levels of recycling.

Industrial demand remains steady although this sector will not escape a slowdown in global economic growth.

Palladium auto demand is steady as growth in emerging economies ameliorates declines in the USA. Palladium use in diesel catalysts continues to grow. Demand for electronics will remain the mainstay of industrial demand. There is continued interest in palladium as a jewellery metal, particularly as an alternative to white gold. 

The tightness in the rhodium market continues with constrained supply and strong autocatalyst and industrial demand offsetting heightened thrifting activity. 

10. Prospects

Management continues to vigorously address unit costs. The emphasis on increasing volumes and improving operating efficiencies remains a driver of performance at operations. Key risks affecting future output include the impact of constrained electricity supply on production and expansion projects, the ongoing skills shortage and production stoppages related to safety. Anglo Platinum's commitment to employee safety will continue to be an area of focus. 

Mining output in the second half of 2008 will increase significantly as Amandelbult and the Turffontein shaft have returned to full production and the Mogalakwena North project ramp-up is almost complete. Smelter availability for the balance of 2008 will assist in reducing pipeline stocks accumulated at the half-year. Consequently the outlook for refined platinum production remains 2.4 million ounces in 2008.

T M F Phaswana	N F Nicolau	Johannesburg
(Chairman)	(Chief Executive Officer)	25 July 2008

Declaration of interim ordinary dividend (No. 111) 

Notice is hereby given that an interim dividend of 3 500 cents per ordinary share, in the currency of the Republic of South Africa, has been declared in respect of the six months ended 30 June 2008. The dividend is payable to shareholders recorded in the books of the Company at the close of business on Friday, 22 August 2008.

The salient dates for the interim ordinary dividend are as follows:
Salient Dates for South Africa and United Kingdom	2008
Last day to trade (cum dividend)	Friday, 15 August
First day of trading (ex dividend)	Monday, 18 August
Currency conversion date (for sterling payments from London)	Tuesday, 19 August
Record date	Friday, 22 August
Payment date	Monday, 25 August

Share certificates may not be dematerialised or re-materialised and no conversion of preference shares into ordinary shares will be permitted between Monday, 18 August 2008 and Friday, 22 August 2008, both days inclusive, nor may transfers take place between the South African and United Kingdom share registers during this period.

  On Monday, 25 August 2008, the dividend will be electronically transferred to the bank accounts of all certificated shareholders where this facility is available. Where electronic fund transfer is either not available or not elected by the shareholder, cheques dated Monday, 25 August 2008 will be posted on that date. 

Holders of dematerialised shares will have their accounts credited at their CSDP or broker on Monday, 25 August 2008.

Shareholders registered on the United Kingdom register will be paid the dividend in pounds sterling at the rate of exchange determined on Tuesday, 19 August 2008. 

A further announcement stating the rand/sterling conversion rate will be released through the relevant South African and United Kingdom news services on Wednesday, 20 August 2008.

The dividend is payable subject to payment conditions which may be inspected at or obtained from the Company's Johannesburg Office or from its London Secretaries.

By order of the Board

J D Meyer	Johannesburg
Group Company Secretary	25 July 2008

  supplementary information

Consolidated Statistics*

		Six months	Six months	Year
		ended	ended	ended
		30 June	30 June	31 December
Total operations		2008	2007	2007
Marketing statistics
Average market prices achieved
Platinum	(US$/oz)	1 906	1 233	1 302
Palladium	(US$/oz)	436	355	355
Rhodium	(US$/oz)	5 833	4 274	4 344
Nickel	(US$/lb)	12.14	19.98	17.04
US$ Basket price (Net sales revenue per refined Pt ounce sold)	(US$)	3 115	2 613	2 579
Platinum	(R/oz)	14 678	8 825	9 149
Palladium	(R/oz)	3 354	2 530	2 499
Rhodium	(R/oz)	45 005	30 584	30 593
Nickel	(R/lb)	92.78	143.64	121.13
R Basket price (Net sales revenue per refined Pt ounce sold)	(R)	23 989	18 706	18 167
Average exchange rate achieved on sales	(R : US$)	7.7004	7.1579	7.0431
Exchange rate at end of period/year	(R : US$)	7.8280	7.0472	6.8360
Financial statistics and ratios
Gross profit margin	(%)	41.2	46.1	41.0
Earnings before interest, taxation, depreciation and amortisation (EBITDA)	(R millions)	13 044	12 270	21 946
Operating profit to average operating assets	(%)	66.1	67.8	58.6
Return on average shareholders' equity	(%)	58.2	48.1	44.1
Return on average capital employed	(%)	65.3	84.0	66.6

  

Interest cover - EBITDA		27.4	75.2	54.6
Net asset value per ordinary share	(R)	135.1	127.7	121.7
Net debt to total capital employed	(%)	14.8	-	13.1
Interest-bearing debt to shareholders' equity	(%)	32.4	3.6	28.4
Cost of sales per total Pt oz sold	(R)	14 247	10 087	10 711
Cash operating cost per equivalent Pt oz (excluding ounces from purchased concentrate and associated costs)	(R)	10 498	7 200	8 181
Cash operating cost per refined Pt oz	(R)	11 869	7 645	8 129
Equivalent refined platinum production	(thousands) (oz)	1 128.2	1 274.0	2 471.4
Gain in ounces indicated by physical stock count	(thousands) (oz)	46.8	9.8	9.8
Refined platinum production	(thousands) (oz)	(1 001.1)	(1 193.7)	(2 474.0)
Mining	(thousands) (oz)	(810.5)	(1 062.7)	(2 164.0)
Purchase of concentrate	(thousands) (oz)	(190.6)	(131.0)	(310.0)
		---------	---------	---------
Platinum pipeline movement	(thousands) (oz)	173.9	90.1	7.2
		---------	---------	---------

* Not reviewed or audited

  Anglo Platinum Limited and its Subsidiaries ("Anglo Platinum") (Incorporated in the Republic of South Africa) (Registration number 1946/022452/06) JSE Codes: AMS; AMSP ISIN: ZAE000013181; ZAE000054474

A member of the Anglo American plc group

Registered Office

55 Marshall Street, Johannesburg, 2001

(P.O. Box 62179, Marshalltown, 2107)

Facsimile +27 11 373-5111

Telephone +27 11 373-6111

south african registrars

Computershare Investor Services (Pty) Limited 

(Registration No. 2004/003647/07)

70 Marshall Street, Johannesburg, 2001

(P.O. Box 61051, Marshalltown, 2107)

Facsimile +27 11 688-5221

Telephone +27 11 370-5000

London Secretaries

Anglo American Services (UK) Ltd,

20 Carlton House Terrace, London, SW1Y 5AN, England

Facsimile +44 207 968-8755

Telephone +44 207 968-8888

united kingdom registrars

Capita Registrars Limited

The Registry, 34 Beckenham Road,

Beckenham, Kent, BR3 4TU, England

Facsimile +44 208 639-2142

Telephone +44 870 162-3100 (within UK)

+44 208 639-2157 (outside UK)

Detailed results are available on the Internet at: http://www.angloplatinum.com

E-mail enquiries should be directed to:

traymond@angloplat.com

  Directors and Company Secretary

executive directors: N F Nicolau (Chief Executive Officer), N B Mbazima (Zambian).

NON-EXECUTIVE DIRECTORS: T M F Phaswana (Chairman), P M Baum, C B Carroll (American), R J King (British),R Medori (French), A E Redman (British).

INDEPENDENT NON-EXECUTIVE DIRECTORS: T A Wixley (Deputy Chairman), R M W Dunne (British), Dr B A Khumalo, M V Moosa, S E N Sebotsa.

ALTERNATE DIRECTORS: P G Whitcutt.

Group Company Secretary: J D Meyer.

world leader in platinum

ENDIR EASXSAFSPEFE