Anglo Platinum expects strong second half

Finance

Anglo Platinum Ltd, the world’s largest platinum producer, says it still expects to refine and sell a total of 2.5Moz of platinum in the year to end-December.

The company expects the platinum price to average US$1,500/oz over the second half of the year, “if economic recovery continues”.

A total of 1.08Moz of platinum were sold and refined in the first six months, implying production of around 1.42Moz in the next period, “thereby expecting a stronger second half to the year,” according to the company.

Cash operating costs per equivalent refined platinum ounce (excluding external concentrates) was up 6.7% from the same period a year earlier at R11,493/oz (US$1,524/oz). The company achieved a basket price of R19,165/oz platinum sold, up 39%.

The company said: “We expect cost improvements achieved so far to be sustained and we continue to aim to keep our unit cash costs per equivalent refined platinum ounce for the year around the same level as in 2008 and 2009, just above R11,000 per equivalent refined platinum ounce.”

Headline earnings of R2.56 billion were 532% higher than a year earlier, “in line with significantly higher metal prices.”

Net debt decreased substantially to R8.245 billion from R19.261 billion six month earlier. The company conducted a R12.5 billion rights issue during the period, generated R2.6 billion in cash from operating activities, while capital expenditure reduced by R3 billion.

The company has also received letters of conversion for its mining rights which were granted by the Department of Minerals on July 21.

“Cash flow should be  positively impacted by the receipt of proceeds from the planned sell-down of our stake in BRPM as well as the release of monies held in escrow in respect of the sale of our stake in the Booysendal Joint Venture in 2009.”                

However the company said it continues to suspend dividends until there is a “sustainable improvement in cash flow.”