Amplats’ expects lower production impact from Waterval furnace rebuild

JOHANNESBURG (miningweekly.com) – JSE-listed Anglo American Platinum (Amplats) has narrowed the estimated production impact of the Rustenburg-based Waterval smelter’s unplanned shutdown of furnace one to around 75 000 oz.

The run-out of molten furnace matte at the smelter on September 10, which slashed some 20% of the company’s smelting capacity, was initially expected to cut up to 100 000 oz from refined production for the 2016 financial year.

Despite the capacity loss and the R750-million expected impact on earnings before interest and taxes, Amplats aims to maintain its full-year guidance of 2.3-million to 2.4-million platinum ounces, as well as its sales volumes for the year through supplemented inventory and market activities.

The subsequent bringing forward of a R125-million furnace rebuild from 2018 to the fourth quarter of 2016, which is expected to take three to four months, led to a 6 000 oz decrease in third-quarter refined production.

However, during the three months to September 30, a recovery at the Precious Metals Refinery in processing additional matte material that was built up led to a 14% uptick in refined platinum production to 694 600 oz.

During the quarter under review, Amplats’ total platinum production edged up 1% quarter-on-quarter to 619 100 oz as a result of improved performances at its Mogalakwena, Amandelbult and Unki operations, as well as at the Modikwa, Kroondal and Bafokeng Rasimone Platinum Mine joint ventures.

Unki’s output increased 16% to 18 200 oz during the quarter under review, supplemented by a 12% increase in production from Mogalakwena to 100 700 oz and a 1% rise to 128 300 oz from Amandelbult.

Platinum production from Rustenburg operations, including the Western Limb Tailings Retreatment plant, contracted 3% to 120 900 oz.

Meanwhile, sales volumes for the September quarter, at 588 000 oz, were less than refined production, as leases of 49 000 oz were repaid and the balance used to build up refined inventory.