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Amplats closes ACP unit for rebuild, lowers guidance

Anglo American Platinum has lowered guidance after closing its troubled Anglo Converter Plant Phase B unit in South Africa for a full rebuild in 2021.
Amplats closes ACP unit for rebuild, lowers guidance Amplats closes ACP unit for rebuild, lowers guidance Amplats closes ACP unit for rebuild, lowers guidance Amplats closes ACP unit for rebuild, lowers guidance Amplats closes ACP unit for rebuild, lowers guidance

Anglo American Platinum platinum, produced in South Africa

Staff reporter

Amplats cut refined production and sales guidance for 2020, from 3.1-3.3 platinum group metals ounces to circa 2.5Moz.

It's not been a good year for its ACP plant in Rustenburg, with the company forced to declare force majeure earlier this year after the entire plant was closed, due to an explosion in the Phase A unit and the risk of an explosion in the back-up Phase B unit where water was detected. 

Phase B was stopped again in June due to what was described as an unrelated water leak.

CEO Natascha Viljoen said last week following a series of further water leaks, the company made the "pre-emptive decision to now close the ACP Phase B unit to ensure we protect our employees, operating environment and the integrity of our assets".

"As indicated in our Q3 production report on 22 October, the ACP Phase B unit has been fragile and has unfortunately recently experienced a number of further instances of water leaks," she said.

"Whilst this early closure will result in a temporary build up in work-in-progress inventory, we continue to make good progress with the rebuild of the main ACP Phase A unit, which we expect to complete towards the end of this year."

The company had said production was disrupted for 20 days during the September quarter due to repairs, maintenance, testing and monitoring at ACP Phase B.

It said there was no change to other guidance and it would engage with customers to minimise any disruption to contractual obligations.

The converter plant is among its processing facilities in South Africa.

Amplats did not refer to the cost of the Phase B rebuild.

Back in May, as it prepared to restart Phase B and lift force majeure, it had said the estimated final cost of repairs for the Phase B unit was R150 million (US$8.8 million).

The Phase A rebuild had been estimated in March at R500-600 million (US$32-38.6 million).

Amplats said it had an unaudited net cash position of about R28 billion (US$1.8 billion) at October 31 and had R25 billion (US$1.6 billion) of committed facilities available.

Its shares (JSE: AMS) closed up 0.59% on Friday to 114,162c, capitalising it about R303 billion (US$19.5 billion).