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Amplats slashes capex further, output hit by strikes

25 Oct 2012

JOHANNESBURG ( – JSE-listed Anglo American Platinum (Amplats) on Thursday slashed its capital expenditure (capex) by another R800-million and said the wild cat strikes in South Africa had cost it 138 000 oz of production so far.

The platinum giant lowered its 2012 capex plans to R6.5-billion, from R7.3-billion in July, when it lopped R700-million off its R8-billion capex estimate. This was in addition to the R1.1-billion it capex cut announced in February.

“We will continue to monitor the impact of illegal strike on our capital expenditure plans with a view of making adjustments to ensure effective capital allocation and appropriate prioritisation of projects,” the Chris Griffith-led company said.

Amplats said wildcat strikes had cost it 42 000 oz of production across its own and joint venture operations during the three months to the end of September and that a further 96 000 oz were lost since October 1.

The group lost about 4 500 oz/d of platinum production across all strike-hit operations.

Third-quarter equivalent refined platinum production fell 6% year-on-year to 626 000 oz in the three months to September 2012, compared with the 667 000 produced in the corresponding period in the prior year.

Amplats pointed out that production from its own operations fell 5% year-on-year, from 447 000 oz in the three months to September 2011, to 426 000 oz in the period under review.

Production increases of 22% and 13% at the Dishaba and Khomanani operations respectively, as well as higher output at the Unki and Bathopele mines, were offset by 23% and 26% lower production from Union North and South respectively, as well as declines in platinum output at the Mogalakwena, Tumela and Siphumelele mines.

Amplats’ Rustenburg mines achieved 148 000 oz of platinum production – down 0.3% year-on-year and up 2% quarter-on-quarter – despite losing 40 000 oz on the back of illegal strikes.

The company lowered its targeted 2012 production guidance from between 2.4-million and 2.5-million ounces, to between 2.2-milion and 2.4-million platinum ounces, owing to the illegal industrial action, while it increased its unit cash operating cost guidance from R15 000 an equivalent refined platinum ounce, to between R15 500 and R16 000 an equivalent refined platinum ounce.