Anglo American Platinum (AMS), or Amplats, is the world's second-largest platinum-producing company (after Sibanye), responsible for a significant portion of global platinum production. Anglo American owns 77.62% of Amplats. The company was a pioneer in the South African platinum mining sector, shifting from expensive deep-level mining to shallower, more mechanised mining operations. Over the past five years, Amplats has reduced the number of its mines from 18 to 7, cut overheads by 50%, and halved its workforce. These strategic changes are now yielding substantial benefits.
The Mogalakwena open-cast operation, a palladium-rich mine, boasts some of the lowest costs in the platinum group metals (PGM) industry worldwide. A new project at Mogalakwena is set to increase platinum production by 250,000 ounces and palladium production by 270,000 ounces. Additionally, Amplats recently acquired Glencore's 40.2% stake in their joint venture Mototolo mine and the adjacent Der Brochen property for R1.5bn. The Mototolo mine is a highly mechanised shallow operation that can be extended into Der Brochen without the need for new surface infrastructure.
The platinum market faces challenges from an efficient recycling industry, which produces about 2 million ounces annually by recovering platinum from old auto catalysts. Despite these challenges, we believe AMS is the best PGM share on the JSE, although it remains a volatile and unpredictable commodity share.
As part of its expansion plans at Mogalakwena, Amplats plans to relocate 1,000 families of its employees, which could lead to potential unrest. On 10th December 2021, the company announced a R3.9bn extension to the life of its Mototolo/De Brochen mines, extending their operational life to beyond 30 years. On 15th February 2023, the company announced that CEO Natascha Viljoen would resign but would serve out her 12-month notice period.
In its results for the year to 31st December 2023, Amplats reported refined PGM production down 1%, with the rand basket price of PGMs per ounce down 26%. Revenue fell 24%, and headline earnings per share (HEPS) decreased by 71%. The company stated, "Refined production was 1% lower, primarily due to lower metal-in-concentrate production and the impact of Eskom load-curtailment of c.82,000 PGM ounces. This was offset by the release of concentrate stocks. Sales volumes increased by 2% due to the drawdown in refined stock. Our realised dollar basket price fell by 35% in 2023 to $1,657 per PGM ounce - the lowest level since 2019."
This share is a speculation on the international prices of the platinum group metals it produces and is hence very volatile. In an update for the three months to 31st March 2024, Amplats reported PGM production down 7% and PGM sales volumes unchanged. In a trading statement for the six months to 30th June 2024, the company estimated that HEPS would be between 15% and 25% lower. The company stated, "Earnings have decreased for the year largely due to a 24% lower realised ZAR PGM basket price relative to H1 2023."
Technically, the share has been falling since March 2022, mainly due to industry challenges including loadshedding and falling prices for their production. We recommend waiting for a clear upside break through the downward trendline before investigating further. On 19th February 2023, the company announced the possible retrenchment of 3,700 employees.
The Mogalakwena open-cast operation, a palladium-rich mine, boasts some of the lowest costs in the platinum group metals (PGM) industry worldwide. A new project at Mogalakwena is set to increase platinum production by 250,000 ounces and palladium production by 270,000 ounces. Additionally, Amplats recently acquired Glencore's 40.2% stake in their joint venture Mototolo mine and the adjacent Der Brochen property for R1.5bn. The Mototolo mine is a highly mechanised shallow operation that can be extended into Der Brochen without the need for new surface infrastructure.
The platinum market faces challenges from an efficient recycling industry, which produces about 2 million ounces annually by recovering platinum from old auto catalysts. Despite these challenges, we believe AMS is the best PGM share on the JSE, although it remains a volatile and unpredictable commodity share.
As part of its expansion plans at Mogalakwena, Amplats plans to relocate 1,000 families of its employees, which could lead to potential unrest. On 10th December 2021, the company announced a R3.9bn extension to the life of its Mototolo/De Brochen mines, extending their operational life to beyond 30 years. On 15th February 2023, the company announced that CEO Natascha Viljoen would resign but would serve out her 12-month notice period.
In its results for the year to 31st December 2023, Amplats reported refined PGM production down 1%, with the rand basket price of PGMs per ounce down 26%. Revenue fell 24%, and headline earnings per share (HEPS) decreased by 71%. The company stated, "Refined production was 1% lower, primarily due to lower metal-in-concentrate production and the impact of Eskom load-curtailment of c.82,000 PGM ounces. This was offset by the release of concentrate stocks. Sales volumes increased by 2% due to the drawdown in refined stock. Our realised dollar basket price fell by 35% in 2023 to $1,657 per PGM ounce - the lowest level since 2019."
This share is a speculation on the international prices of the platinum group metals it produces and is hence very volatile. In an update for the three months to 31st March 2024, Amplats reported PGM production down 7% and PGM sales volumes unchanged. In a trading statement for the six months to 30th June 2024, the company estimated that HEPS would be between 15% and 25% lower. The company stated, "Earnings have decreased for the year largely due to a 24% lower realised ZAR PGM basket price relative to H1 2023."
Technically, the share has been falling since March 2022, mainly due to industry challenges including loadshedding and falling prices for their production. We recommend waiting for a clear upside break through the downward trendline before investigating further. On 19th February 2023, the company announced the possible retrenchment of 3,700 employees.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.