Anglo Platinum’s
Potgietersrust
platinum mine plant
 
Johannesburg — MININGREVIEW.COM — 12 February, 2008 – The Anglo Platinum group – the world’s leading primary producer of platinum group metals (PGMs) – has re-affirmed its confidence in the continued robust demand for platinum, and will continue with its multi-billion rand South African expansion programme in 2008.

Announcing its 2007 annual results here, the company said it expected total capital expenditure for this year to be between R10.5 and R11.5 billion. It also revealed that capital expenditure for 2007 had amounted to R10.7 billion – an increase of more than 60% on the R6.6 billion spent in 2006. Capital expenditure in 2007 broke down into R5.24 billion in expansion expenditure R5.14 billion in maintenance operations, and R275 million in capitalised interest.
 
“The rate of expansion is reviewed on an ongoing basis against Anglo Platinum’s growth strategy,” the results statement explained. “The long-term outlook for metal prices remains positive, and consequently studies evaluating the ramping up of various projects continue.”

The statement pointed out that the strong global demand for resources was placing material inflationary pressure on capital expenditure and the ability to meet project schedules. “The effect of this was experienced in the latter part of 2007”, it added, “and these pressures are likely to continue in the foreseeable future.”

Moving onto the results, Anglo Platinum achieved record headline earnings in 2007.Factors contributing to the increase were higher US dollar prices realised on metals sold and a rand / US dollar exchange rate that was on average weaker during 2007. This was offset by lower sales volumes on the back of reduced production from mining operations.

Headline earnings and headline earnings attributable to ordinary shareholders increased to R12.3 billion, with headline earnings per ordinary share decreasing 3% to 5.239 cents as a result of an increased weighted average number of shares in issue in 2007. A final dividend of 2 300 cents per ordinary share has been declared, maintaining a dividend cover ratio of 1.

Gross sales revenue increased by R7.61 billion to R47.0 billion. The increase was the result of higher US dollar metal prices achieved on all metals sold, which contributed R8.28 billion of the increase; and a weaker average rand / US dollar exchange rate of R7.04, compared to R6.82 achieved in 2006, which increased revenue by R1.59 billion. This was offset by lower volumes of metals sold, which reduced revenue by R2.26 billion. Refined platinum sales for the year ended 31 December 2007 amounted to 2.48 million ounces.

The average prices achieved on platinum, palladium and nickel sales for the year were US$1 302 per ounce, US$355 per ounce and US$17.04 per pound respectively. The average price achieved on rhodium sales for the year was US$4,344 per ounce, affected by existing long term contractual arrangements with some customers to support and develop the rhodium market. Anglo Platinum is at an advanced stage of negotiations to achieve mutual recognition with its relevant customers with the objective of moving towards a contractual price for rhodium that is market-related.

Equivalent refined platinum production for 2007 decreased by 167 200 ounces or 6% compared to 2006. The intervention aimed at a significant improvement in employee safety, the shortage of skilled labour, competition for labour at all levels, strike action at joint ventures, and the unsettled labour situation associated with wage negotiations all contributed to the decrease in production. Refined platinum production for 2007 decreased by 12% to 2.47 million ounces.

Cost of sales increased by R4.99 billion to R27.5 billion.