Natascha Viljoen’s year of rolling Angloplat crises
But PGM behemoth is setting itself up for the next phase
● Anglo American Platinum CEO Natascha Viljoen has come up to her first anniversary in the job at a time when prices and profits in the industry have hit record highs.
But when he introduced her and fellow platinum group metals (PGM) industry CEOs this week on a panel at the annual PGM Day, chair Bernard Swanepoel said Viljoen might not feel as lucky as her peers: “She had a year from hell, perhaps.”
The reference wasn’t just to the coronavirus crisis — rough as that’s been for many CEOs — but to a year of on-off crisis at Angloplats’s processing plant in Rustenburg, one that impacted the global supply and pricing of the metals.
Angloplats is one of the world’s largest producers of PGMs — the platinum, palladium, rhodium, gold, iridium and ruthenium that come out of the ground in each ton of ore. In good times it processes more than half of all SA’s PGMs, smelting and converting ore into refined product for some of its competitors as well as for itself.
But just 10 days before Viljoen’s appointment was announced in February last year, one of two units at the Anglo Converter Plant (ACP) in Rustenburg exploded when the furnace was started up following a rebuild. Then the second unit which was scheduled to be offline for its rebuild had to be shut down after water was detected in the unit, causing Amplats to declare force majeure.
There followed a year in which the second unit was repeatedly up and then down, until it was eventually taken out for a complete rebuild late last year. Fortunately, the rebuild of the first unit was completed by December, ahead of schedule, and Amplats is on its way to restoring the supply of refined metals.
But it will be a long road. And it must be particularly galling for Viljoen, who came from processing as global head of processing for the Anglo American Group for several years, and for Lonmin before that, before she was appointed to head the group’s 79%owned Amplats.
Has anyone suggested she might bear some responsibility for the ACP troubles? It’s a question she’s been waiting for all year, she said, speaking to Business Times this week on the virtual sidelines of PGM Day. She didn’t have accountability for execution, but was in a consulting capacity, in the world of technical performance. However, she did see it as her role to identify the risks and trade-offs involved in capital- allocation decisions and if there was a failure in her previous role, she said, it was her inability to “make sure that the risk trade-offs were done appropriately”.
“I don’t think the industry appreciates the impact of maintenance,” she said. “I feel very strongly that in the mining industry we have these continuous mining and processing conversations but the conversation about how we maintain our assets never surfaces to the same level.”
For that reason, Viljoen added an executive in charge of asset strategy and reliability to her new exco. And she made a strong pitch in the PGM Day session for the industry to be more serious about maintaining its assets and allocating capital to this, not just to expanding its operations or prolonging their lives.
“In my experience, for every year you neglect maintenance, you take three to four years to pick it up and a huge amount of cost,” she said. At least the ACP shutdowns happened while the market, too, was shut down because of Covid — otherwise the impact might have been worse, she said.
Sieberana Research MD René Hochreiter doesn’t think anyone was to blame for the woes at ACP, which he attributes more to bad luck — though if Angloplat hadn’t shut down its older converters years ago when it commissioned the new ACP units, it would at least have had a backup, he said.
The supply-and-demand dynamics in PGMs were at the centre of the conversation at PGM Day. Supply has been constrained by the lack of investment in the industry generally over the past decade or so, as well as more recently by the Covid lockdowns and Angloplat’s production issues.
At the same time demand for the metals has been ramping up rapidly because of their ever greater “green” role, in autocatalysts for conventional internal combustion engine (ICE) vehicles as well as their huge potential in the hydrogen economy of the future, where platinum will be required both in the production of hydrogen and in the fuel cells that could power heavy vehicles — such as the hydrogen-powered truck that Amplats is due to launch soon at its huge open-pit Mogalakwena mine.
But with electric vehicles gaining market share, many are seeing an end to ICE vehicles in coming decades. And with supply normalising and expansion plans at most of SA’s PGM miners — Angloplat included — there are questions over whether the industry could in coming years revert to oversupply, which would weigh on prices.
Viljoen, who is often asked whether she is bullish on the future of PGMS, said she is “cautiously optimistic rather than bullish — I think when we get too bullish about these things we always end up in trouble”.
Amplats, which last month unveiled a new strategy to modernise and decarbonise old mines and expand new production in the coming decade, expects ICE vehicles will be around for some time, particularly in developing markets, and demand for PGMS will increase as emissions standards tighten. But it is also investing heavily to develop new markets for its products.
As many emphasised at PGM Day, the industry is much more disciplined about capital allocation and investment decisions than it used to be.
“We need to remember supply is capped by processing capacity. That is really capitalintensive and I don’t see anyone spending huge amounts of money on building new processing capacity,” Viljoen said.
As for her first year, the lowlights were the ACP challenges that gave her sleepless nights, as well as losing a colleague at Amandelbult, which the investigation showed was in part due to the impact of Covid on oversight capacity when the mine ramped up operations following the shutdown.
“We’ve learnt expensive lessons in the process of readjusting to this new working world,” said Viljoen.
But Amplats’s agility and its ability to respond to the new working world has also been one of the highlights. “Despite everything, we worked through as a team and we continued with the reshaping of our business and setting ourselves up for the next phase of development.”
I don’t think the industry appreciates the impact of maintenance