Johannesburg, South Africa — MININGREVIEW.COM — 27 July 2009 – First-half earnings at Anglo Platinum – the world’s number one platinum producer “’ evaporated as expected in the first half of 2009 on a weaker metal price, but the company maintained that it would meet its annual output target.
A results statement released here confirmed that headline earnings per share at Angloplat “’ majority owned by mining group Anglo American Plc “’ had fallen 95% to 169 cents in line with its own forecast. Earnings had been eroded partly by a 51% fall in the U.S. dollar price for its platinum group metals, as well as a simultaneous weakening of the rand.
The platinum price was battered by the worst economic crisis since the Great Depression, and more than halved from an all-time high of US$2 230 in March 2008. It has recovered somewhat since, and traded at US$1 200 today.
The statement said refined platinum production had risen 6% to 1 056 400 ounces, compared with the same period in 2008, and that Angloplat would meet its own target of 2.4 million ounces for the full year.
“The results are in line with expectations. It’s good to see they are closing expensive shafts to cut costs,” said Sanlam Investment Management platinum analyst Barend Ritter. “Still the company is under a lot of pressure in terms of the weak metal price, some of its shafts are close to break-even, cash generation is not that good, and its debt is rising.”
Chief executive Neville Nicolau said he expected the price of the metal to remain above US$1 200 an ounce for the rest of the year, given robust platinum jewellery sales in China, firm platinum investment demand and a probable increase in demand for platinum from the auto-catalyst sector.
Nicolau said the company’s supply of the metal could rise to 2.6 million ounces based on inventory and smelting capacity, should market demand rise in the second half of 2009.
He added that although the platinum market was currently in balance, a deficit was expected to arise in the next few years as global markets and economies recovered.
“The platinum price is expected to trend to a long-term level of US$1 350 per ounce, supported by the global economy recovery," he added.
“It is our intention to prepare to produce around 2.5 million platinum ounces per annum for the next three years, with a small but steady increase in production thereafter,” he concluded.