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ANGLO American Platinum (Amplats), the subsidiary of Anglo American plc, expects overall profits to climb 578% in the six months to the end of June amid sustained metal prices and rising prices. sales volumes.
Amplats, which operates several assets, including the Mogalakwena surface mine in Limpopo, said yesterday that overall profits would likely climb to R46.8 billion.
Basic earnings per share would likely increase by 600%, while earnings per share could reach R17.7, Amplats said.
“The expected increase in overall profit and basic profit is mainly due to a 29% increase in the basket price in rand and an increase in sales volumes of its own production excluding trading activities,” Amplats said.
Highlights for the second quarter of 2021 include the 59% increase in production to 601,500 ounces due to the strong recovery in production from all operations compared to the previous period, which was materially affected by the national lockdowns aimed at curbing the spread of Covid-19.
Refined Platinum Group Metals (PGMs) climbed 233% to 1.353 million ounces due to operational stability following rebuilding and re-commissioning of the Anglo Converter Plant Phase A unit in November – which worked ahead of the plan – as a result of an explosion in the converter the past year. PGM sales increased 162 percent to 1.437 million ounces.
Amplats, however, has tightened PGM production for 2021 to between 4.2 million and 4.4 million ounces due to lower receipts of third-party concentrates and the continued impact of Covid-19 on operations. Refined MGP production was revised upwards due to proven operational stability, to between 4.8 and 5 million ounces.
Parent company Anglo chief executive Mark Cutifani said the group has achieved strong operational performance supported by comprehensive Covid-19 measures to help protect the lives and livelihoods of its workforce and host communities.
“We have generally maintained operating levels at around 95% of normal capacity and as a result, production increased 20% from the second quarter of last year, with higher expected rough diamond production. at De Beers, as well as strong plant performance. at our Los Bronces copper mine in Chile and higher throughput at our Mogalakwena platinum group metal mine in South Africa, ”said Cutifani.
Diamonds sparkled as rough diamond production rose 134% to 8.2 million carats, reflecting higher production predicted to meet higher demand for rough diamonds, and the impact of lockdowns in southern Africa in the second quarter of last year.
Commenting on the operational update, Anchor Capital investment analyst Seleho Tsatsi said that Amplats’ trade statement shows the benefits of higher prices for PGMs and a recovery in volumes after a Operationally difficult 2020.
“The Anglo share price has been under pressure lately. For shareholders, the focus will be on what Anglo and the rest of the industry are doing with the significant free cash flow it is generating right now, ”Tsatsi said.
Shares of Amplats closed 2.75% higher at R1 660.14 on the JSE yesterday.