Anglo American Platinum has reported positive cash flow across all operations and R4 billion in free cash in 2015 – despite a market which was in deficit of about 700 000 oz for the year and a 27% decline in dollar price of the precious metal.
According to CEO Chris Griffith, this has been driven by “improving our operational performance and efficiencies; reducing costs and capital expenditure; and cutting out unprofitable ounces.”
With stronger platinum production in 2015, total production was up 25% year on year, especially thanks to the Amandelbult and Unki mines. Mogalakwena mine also reported record performance, along with the Rustenburg and Union mines where there was an increased focus on operational efficiency.
According to a company release, total refined platinum production of 2.46 Moz was up 30% year on year, which was made up by platinum production of 2.33 Moz; supplemented by a draw-down in pipeline inventory of 130 000 oz.
The increased refined production led to an increase in platinum sales, up 17% year-on-year, to 2.47 million platinum ounces.
Subsequently, the company has also reduced it net debt to R12.8 billion from R14.6 billion.
The focus for 2016 will remain on managing costs – cash operating cost per platinum ounce was R19,266, a reduction of 15% compared to the 2014 price of R22,574. Allowing for normalisation following strike action, 2015 unit costs have increased by 6%, a figure well below mining inflation figures.
According to the company, “headline earnings decreased to R107 million from R786 million in 2015, due to the sharp dollar PGM price declines as well as once-off restructuring costs of R900 million and impairments. The company recorded impairments totalling R14 billion, with R1.8 billion impacting headline earnings. Excluding these one-off items, headline earnings increased to R2.7 billion or 452 cents per share, a 50% increase year-on-year.”