Shut-down at facility to affect Amplats earnings, Newsline

JOHANNESBURG – ANGLO American Platinum (Amplats), the world’s second-biggest platinum group metals (PGM) supplier, said yesterday that the decision to again shut its processing facility in Rustenburg would likely have a R6 billion effect on earnings before interest taxation, depreciation and amortisation (Ebitda) for 2020.

Amplats said the knock-on effect on Ebitda was as a result of it lowering its refined production and sales guidance for 2020 due to the closure of the Anglo Converter Plant (ACP) Phase B unit.

The company said yesterday that it had shut down the Phase B unit following a series of water leaks to ensure an ongoing safe operating environment.

Due to the action, refined production and sales guidance for 2020 has been revised to 2.5 million PGM ounces from a previous estimate of between 3.1 million and 3.3 million PGM ounces, said Amplats.

Last month, Amplats flagged that the ACP Phase B unit had been fragile and had unfortunately recently experienced a number of further instances of water leaks.

“Whilst the ACP management team has done extraordinary work to keep the unit operating safely over the past several months, we have taken this pre-emptive decision to now close the ACP Phase B unit to ensure we protect our employees, operating environment and the integrity of our assets,” said chief executive Natasha Viljoen.

While this early closure would result in a temporary build up in work-in-progress inventory, the company continued to make good progress with the rebuild of the main ACP Phase A unit it expected to complete towards the end of this year.

The group said yesterday while the ACP management team had been able to complete repairs to the previous water leak, and after a comprehensive assessment, and with more water leaks discovered, the ACP Phase B unit now required more extensive repair work. As a result, the ACP Phase B unit had been closed for a full rebuild in 2021.

“The company has contingency plans in place and will be engaging with customers to minimise any disruption to contractual obligations,” it said. Amplats shares closed 0.76 percent lower at R1 136.33 on the JSE yesterday.