Showing its metal

Over the past five years Anglo American Platinum has transformed itself into a lean, mean platinum-spewing machine, restructuring and repositioning its portfolio to build a platform that will ensure a robust future for the firm.

The business has been simplified by reducing its operating mines from 18 to seven, and this has reduced overheads by 50% and head count by 60%. Net debt has tumbled from R14.8bn in 2014 to a net cash position of R500m in the first half of 2018, and the company has paid an interim dividend of R1bn.

The group is focusing its efforts and capital on assets with long-term valuecreation potential that are in the lower half of the cash cost curve and that are, or have the potential to be, mechanised. It is thinking hard about the way in which it operates, striving to extract maximum benefit from modernisation and technical innovation.

The focus on cost control continues, with unit costs down 3% per platinum ounce in the period.

On the demand side Amplats sees an opportunity in stimulating latent demand across the jewellery, investment and industrial segments. And it is looking to drive demand for platinum group metals by setting up a structure called AP Ventures. This will raise funds from investors such as the Public Investment Corp in a partnership model, and apply technology and innovative thinking to address the challenges facing the industry.

The company is expecting the uncertain global economic outlook to keep driving volatility in metal prices and exchange rates, but it is wellpositioned to keep growing.

The full effect of the 7,000-page behemoth of EU legislation has yet to work its way through the system