JOHANNESBURG (miningweekly.com) – Despite the current low-price cycle, the critical role that platinum group metals (PGMs) play in helping to form a foundation for cleaner greener world remains indisputable, Anglo American Platinum CEO Craig Miller highlighted at the company’s presentation of solid half-year results on its journey towards demerging from the Anglo American group.

“Our market development efforts help ensure that our products have a sustainable and positive impact on the world. We're leveraging capabilities through these activities and capturing value from the adjacent value chains while diversifying sources of future PGM demand,” added Miller, who expects Anglo Platinum to be a separate primarily Johannesburg-listed mining and marketing company by the end of next year. (Also watch attached Creamer Media video.)

Some key marketing progress that was made in the first half of this year includes the development by Platinum Guild International of Inoveo platinum, a proprietary platinum jewellery alloy, with the help of AI and digital technology.

Potential demand for the alloy represented more than 300 000 oz/y of platinum, it was stated during the half-year results presentation covered by Mining Weekly.

Owing to Inoveo being extremely well received in the US, a global expansion is now planned, starting in India.

In fuel cell electric vehicles (FCEV), Anglo Platinum is advancing the implemention of green-hydrogen taxi mobility in Europe, in partnership with Hype, the official taxi provider to the 2024 Paris Olympic Games. Expansion into Hamburg is now also imminent.

FCEVs offer a substantial opportunity of six-million ounces of platinum a year, if one in ten cars is an FCEV.

In batteries, extensive testing has been conducted at the Battery Innovation Center in Indiana, in the US, on Lion Batteries technology.

Early results show a 20% increase in energy density, and a 40% reduction in the cost of lithium sulphur batteries.

The next step is to explore product development, and further commercialisation pathways.

The potential yearly demand from Lion Batteries is considerable for palladium and platinum if this technology is adopted at scale.

In demand diversification in the US, Europe and China, Anglo Platinum has established three research development projects that will use PGMs and has developed technology for data centers and microchip processes to increase the speed and reduce their energy consumption.

“In a world of big data and artificial intelligence, this represents a substantial demand source for PGMs.

“We envisage many future opportunities turning risks into additional potential demands for our metals by leveraging the characteristics of PGMs and in new applications.

STANDALONE COMPANY

Regarding the demerger from Anglo American, Miller spoke of having the tools but needing to thrive as a standalone company.

“As a start, we have a credible platform, a world-leading endowment, world-class mines and strength across the value chain from technical upstream know-how, through well invested processing infrastructure to our global marketing capabilities.

“We have a fantastic team that has helped build the capabilities essential for leading PGM business in sustainability, innovation and market development,” said Miller, who expressed optimism about the long-term PGM price outlook.

Although in the near-term prices are benefiting from the changing dynamics in the drive chain transitions, applications in addition to fuel cell technology batteries that can build growth over the longer term, include medical and semiconductor technologies.

LIKE FAVOURITE CHILD LEAVING HOME

Especially in the light of the challenging commodity prices, Anglo Platinum chairperson Norman Mbazima acknowledged the efforts across the company to deliver the change necessary for Anglo Platinum to achieve its full potential.

“Real change is often very hard to achieve but the benefits of that change are starting to come through in our performance and we should see the benefits continuing to come through over the coming quarters.

“The momentum in underlying performance comes at an important time for the organisation as we look ahead to our impending demerger from Anglo American.

“My second key message is that we look forward to the future with both confidence and excitement about what can be achieved.

“I see this as a favourite child reaching maturity and leaving the parental home to get married and start a life independent of the parents.

“That means everybody wants us to succeed, including the parents and everybody. We have an outstanding platform to work from. With an industry-leading mineral endowment, world-class mines and processing assets and global marketing capabilities. On this strong foundation, we will build a successful independent business for the benefit of all our stakeholders,” Mbazima outlined.

COST-REDUCTION INITIATIVES

Anglo Platinum CFO Sayurie Naidoo described the first-half performance as being resilient and reflective of cost reduction brought about through the corporate and operational restructuring, efficiency improvements, work prioritisation, contracted reductions and supplier contract negotiations.

The cost reductions of R2.9-bilion delivered included R1.2-billion rand from consumables, R700-million from contractors and labour reductions, and a further R400-million in other costs.

Overhead and corporate costs were cut by R600-million, largely owing to the corporate restructuring completed at the end of 2023.

The continued business reconfiguration initiatives in the second half of 2024 were supplemented by further cost savings.

Anglo Platinum ended the first half of 2024 on June 30 in a R14.5-billion net cash position and restructuring and cost savings measures being advanced.

Half-year refined PGM production was up 5% to 1.78-million ounces compared with the prior period, while metal-in-concentrate was a 5%-lower 1.76-million ounces.

Sales volumes increased 9% on inventory drawdown while earnings of R12.3-billion were realised on a PGM dollar basket price of $1 442.

The all-in sustaining cost (AISC) of $957 per three-element (3E) ounce, was well ahead of the below-$1 050 target and on track to sustain cash generation through a low PGM price cycle.

Statutory employee restructuring consultation is complete, and Mortimer Smelter is on care and maintenance.

The action plan includes R10-billion yearly cost savings from operating costs and stay-in-business capital from a 2023 baseline and R4.7-billion has been achieved in the first half of the year.

The measures are expected to result in a cash operating unit cost of R16 500 to R17 500 per PGM ounce, as well as an AISC of below $1 050 per 3E ounce in 2024.