News24
22 Feb 2021, 23:43 GMT+10
Platinum group prices have had added sparkle to Anglo American Platinum's (Amplats) earnings, despite the company being impacted by the temporary closure of its smelting plants during the past year.
The producer, which released its annual financial results for the 2020 financial year on Monday, said the average basket price increased by 51% year-on-year to $2 035 (~R30 000) per platinum group metals (PGM) ounce, compared to $1 347 (~R19 800) in 2019.
Rhodium - a byproduct of platinum and used in catalytic converters to reduce toxic gas emissions in exhaust systems - was a key driver of prices.
CEO Natascha Viljoen noted the role of the precious metals mined by the company in "enabling a low-carbon economy", adding that the company would continue to invest in a wide range of efforts to develop and commercialise new applications for such metals.
Following the disturbances Covid-19 presented on operations, that were mitigated by commodity prices and a. favourable exchange rate, the company said its operations were "well-positioned for a strong recovery after facing significant headwinds in 2020".
Earnings before interest, tax, depreciation and amortisation (EBITDA), which is a measure of financial performance, went up 39% from 2019, to R41.6 billion, with a net cash of R18.7 billion recorded for the year.
However, total PGM production declined by 14% year-on-year to 3 808 900 ounces, due to the impact of Covid-19 lockdowns in South Africa and Zimbabwe. Amplats operates the Unki mine in Zimbabwe.
Viljoen said total PGM production is expected to return to pre-Covid-19 levels of between 4.2 and 4.6 million ounces in 2021, with refined production reaching 4.6 to 5 million ounces.
A dividend of R35.35 per share or R9.4 billion was declared.
In 2020, Anglo American Platinum was hit by an intermittent breakdown of its Phase A and Phase B Waterval smelter in Rustenburg, the Anglo Converter Plant (ACP). The disturbance led to a build-up of inventory of around one million PGM ounces and led to a loss of refined sales about R12.8 billion of EBITDA, according to finance director Craig Miller.
"It is expected that this build-up in inventory will be released by the end of 2022," said Miller.
Total refined production, excluding tolling, declined by 42% to 2 713 100 ounces, due to the temporary closure of the ACP. The repair of the ACP Phase A unit was successfully completed by 24 November, and the Phase B unit is undergoing a full rebuild which is scheduled to be completed in the second half of 2021.
"As a result of the ACP process interruptions, there was a build-up of work-in-progress inventory of around one million PGM ounces," the company said.
Amplats and its peers have greatly benefitted from the the current upswing in commodity prices, with the supply and demand for PGMs forecast to rise in 2021 compared to 2020.
Get a daily dose of Hong Kong Herald news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Hong Kong Herald.
More InformationBEIJING, China: China's national soccer team may struggle to stir excitement, but its humanoid robots are drawing cheers — and not...
]LONDON, U.K.: A World Health Organization (WHO) expert group investigating the origins of the COVID-19 pandemic released its final...
FRANKFURT, Germany: Germany has become the latest country to challenge Chinese AI firm DeepSeek over its data practices, as pressure...
TORONTO, Canada: Harvard University and the University of Toronto have created a backup plan to ensure Harvard graduate students continue...
BONN, Germany: Despite widespread belt-tightening across the United Nations, nearly 200 countries agreed this week to increase the...
(New York) - China's government has erased Hong Kong's freedoms since imposing the draconian National Security Law on June 30, 2020,...
NEW YORK, New York - U.S. stocks diverged on Wednesday for the second day in a row. The Standard and Poor's 500 hit a new all-time...
NEW YORK CITY, New York: The U.S. dollar continues to lose ground, weighed down by growing concerns over Washington's fiscal outlook...
KABUL, Afghanistan: Afghanistan, long associated with war and instability, is quietly trying to rebrand itself as a destination for...
SANTA CLARA, California: Executives at Nvidia have quietly been cashing in on the AI frenzy. According to a report by the Financial...
NEW YORK, New York - Global stock indices closed with divergent performances on Tuesday, as investors weighed corporate earnings, central...
TORONTO, Canada: Canadian Prime Minister Mark Carney announced late on June 29 that trade negotiations with the U.S. have recommenced...