Anglo American Platinum (Amplats), which shot the lights out with a set of stupendous cash-splurging, debt-negating, high-dividend-yielding 2018 results, on Monday set its “next new wave of strategy” in motion, which involves extracting the full potential from its operations through people and innovation, investing in its own portfolio to deliver industry-leading cash flows and investing in the development of the market to increase demand. The word ‘platinum’ on its own is ‘out’ and the ‘in’ are the words platinum-group metals (PGMs) as a collective, because of the rhodium, palladium and even ruthenium contributions, which helped to generate free annual cash flow of R5.6-billion. Mining Weekly Online can report that shareholders pocketed R3-billion in dividends off a combined production of 5.2-million ounces of PGMs, and saw their shares perform as the star of the Johannesburg Stock Exchange’s All Share Index. The next wave strategy now involves Amplats CEO Chris Griffith squeezing every last drop out of its PGM mines and joint ventures in South Africa and Zimbabwe in a stabilising, optimising and then global benchmarking progression using low capital expenditure (capex) and targeting lightning-quick, high-margin payback. Outgoing FD Ian Botha, who will be replaced from April by Craig Miller, reported the doubling of headline earnings and move from net debt to post-dividend net cash of R2.9-billion on higher rhodium prices chipping in R2.6-billion, high palladium prices contributing R2.1-billion and high ruthenium prices yielding R1.3-billion. Depressed platinum contributed less than 40% of 2018 Amplats’ revenue at R1.5-billion, reinforcing that the Johannesburg-listed company is a PGMs producer and not just a platinum producer. Huge capex going into large, new long-horizon projects is being avoided and capex-light, fast-return investments are now mainstream and take in even ultra-fine peripheral opportunities in chrome recovery. Amplats is blessed with the wonderful Mogalakwena PGMs mine in Limpopo that again churned out a record 7%-higher 1.2-million ounces of PGMs and generated free cash flow of R4-billion at an all-in sustaining cost (AISC) of $286/oz of platinum. With the company bullish on platinum going forward, it is rolling out a plan to increase Mogalakwena’s platinum alone from 300 000 oz to 550 000 oz at the highest margin of operation, through shovel and truck efficiency improvements, further slope angle increases to lift the cut-off grades. The Amandelbult mine, still in turnaround transition, achieved a 1% PGMs production increase to 869 000 oz and generated free cash flow of R603-million, at an AISC of $794/oz of platinum. Five hundred faster electro-hydraulic drills have been introduced for more efficient drilling at Amandelbult, chrome volume is being increased to two-million tonnes a year and the low-capex extra-low-profile trackless mechanised mining is being introduced on a 20-degree dip as part of a 15 East project. Unki in Zimbabwe, where a new smelter has been commissioned, generated R525-million in free cash flow at an AISC of $616/oz of platinum on 16%-higher PGM production. 1. On the basis of the article, undertake a detailed SWOT analysis of Anglo American Platinum as a learning organisation. A minimum of FOUR (4) significant points each for the strengths, weaknesses, opportunities and threats should be extracted from the article to buttress the discussion. In addition to the SWOT analysis you should indicate how benchmarking could improve Amplats’ understanding of its competitive position and its strengths and weaknesses, and provide a systematic process for effecting change.
Anglo American Platinum (Amplats), which shot the lights out with a set of stupendous cash-splurging, debt-negating, high-dividend-yielding 2018 results, on Monday set its “next new wave of strategy” in motion, which involves extracting the full potential from its operations through people and innovation, investing in its own portfolio to deliver industry-leading cash flows and investing in the development of the market to increase demand.
The word ‘platinum’ on its own is ‘out’ and the ‘in’ are the words platinum-group metals (PGMs) as a collective, because of the rhodium, palladium and even ruthenium contributions, which helped to generate free annual cash flow of R5.6-billion.
Mining Weekly Online can report that shareholders pocketed R3-billion in dividends off a combined production of 5.2-million ounces of PGMs, and saw their shares perform as the star of the Johannesburg Stock Exchange’s All Share Index.
The next wave strategy now involves Amplats CEO Chris Griffith squeezing every last drop out of its PGM mines and joint ventures in South Africa and Zimbabwe in a stabilising, optimising and then global benchmarking progression using low capital expenditure (capex) and targeting lightning-quick, high-margin payback.
Outgoing FD Ian Botha, who will be replaced from April by Craig Miller, reported the doubling of headline earnings and move from net debt to post-dividend net cash of R2.9-billion on higher rhodium prices chipping in R2.6-billion, high palladium prices contributing R2.1-billion and high ruthenium prices yielding R1.3-billion.
Depressed platinum contributed less than 40% of 2018 Amplats’ revenue at R1.5-billion, reinforcing that the Johannesburg-listed company is a PGMs producer and not just a platinum producer. Huge capex going into large, new long-horizon projects is being avoided and capex-light, fast-
With the company bullish on platinum going forward, it is rolling out a plan to increase Mogalakwena’s platinum alone from 300 000 oz to 550 000 oz at the highest margin of operation, through shovel and truck efficiency improvements, further slope angle increases to lift the cut-off grades.
The Amandelbult mine, still in turnaround transition, achieved a 1% PGMs production increase to 869 000 oz and generated free cash flow of R603-million, at an AISC of $794/oz of platinum. Five hundred faster electro-hydraulic drills have been introduced for more efficient drilling at Amandelbult, chrome volume is being increased to two-million tonnes a year and the low-capex extra-low-profile trackless mechanised mining is being introduced on a 20-degree dip as part of a 15 East project. Unki in Zimbabwe, where a new smelter has been commissioned, generated R525-million in free cash flow at an AISC of $616/oz of platinum on 16%-higher PGM production.
1. On the basis of the article, undertake a detailed SWOT analysis of Anglo American Platinum as a learning organisation. A minimum of FOUR (4) significant points each for the strengths, weaknesses, opportunities and threats should be extracted from the article to buttress the discussion. In addition to the SWOT analysis you should indicate how benchmarking could improve Amplats’ understanding of its competitive position and its strengths and weaknesses, and provide a systematic process for effecting change.
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