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Anglo American Platinum improves on guiding its 2021 PGM production outlook but reduces forecast for 2022 and 2023. They also announced a R3.9bn (circa. US$245 mill) Mototolo / Der Brochen life extension project (10 December 2021).

by Dr David Davis

South Africa Platinum


Here is the new guidance and what it means for the investor:

Anglo American Platinum provided an update on its operational outlook and guidance as follows:


Refined production guidance has been increased from 4.8 – 5.0 to 5.0 – 5.1moz due to a continued strong performance from the ACP Phase A, leading to higher-than-expected refined production. The majority of the build-up in work-in-progress (WIP) inventory (due to the temporary closure of the ACP in 2020 for repairs) has been refined in 2021. The remaining build-up in WIP inventory will be refined in 2022.

Metal-in-concentrate (M&C) production is likely to be within guidance at c.4.3 million PGM ounces for 2021.


Note that PGMs stands for: platinum, palladium, rhodium, iridium, ruthenium, and gold.

Platinum Forecast 2022,  Platinum Forecast 2023, Platinum Forecast 2024,

In our previous reviews on Platinum, we noted that there has been volatility in PGM supply, demand and prices over the past two years. Supply was disrupted to varying extents as a result of Covid-19 as well as the breakdown of Amplats’ ACP plants, which resulted in a significant backlog of over 1moz.

The increase in supply during this period may be described as a “transitory effect”. Without processing this backlog, the mining output level would have been below that of 2019. It is important to note that in many cases, the increase in PGMs supply in 2021 has given the artificial impression of an abundance of metal coming onto market from South Africa. In this regard, the market in my view, has taken a short- term view, which has kept downward pressure on PGM prices and in particular, the platinum price.


I am of the view that South African Platinum mine supply will continue to decline at a CAGR of at least c.-1.4% over the long term. This will tighten the supply market and continue to put upward pressure on the price of Platinum.

(South African Platinum Mine Supply in Decline as demand Gains Significant reaction Part I and Part II).

Platinum price on mining

This view is supported by Anglo American Platinum’s reduced forecast of PGM production for 2022 and 2023.


Due to the strong refined production performance in 2021, resulting in the majority of the built-up WIP inventory being processed, refined production forecast guidance for 2022 has been revised downwards to 4.2 – 4.6mozs PGM ounces, to reflect the expected M&C production, the processing of the lower WIP inventory, and the scheduled Polokwane smelter rebuild.

This first full rebuild of the Polokwane smelter is scheduled for H2 2022. This rebuild is in line with Anglo Platinum’s asset management strategy and their strategic priority of embedding resilience across the asset base and the business, including a detailed programme of planned maintenance for all assets.

Anglo American Platinum indicates that M&C production in 2022 will be impacted by planned maintenance, particularly at the Mogalakwena South Concentrator, which is aligned with the downtime at the Polokwane smelter. As a result, M&C production for 2022 is expected to be in the region of 4.1 – 4.5moz

FORECAST 2023 – 2024

M&C PGM production will remain flat in 2023 and 2024 as Kroondal and parts of the upper section at Tumela mine, part of the Amandelbult complex, come to their end of life.

Anglo American Platinum indicates that this decrease in production is expected to be offset by the benefits of the P101 operational excellence programme, and the modernisation plans at Amandelbult, which should result in an increase in PGM volumes mined from the remaining portfolio of assets.

Part of the increase in mined volumes is expected to come from Mogalakwena, with its mine plan sequenced to mine through a higher base metals area from 2022. In conjunction with the Polokwane smelter rebuild in H2 2022, which will lead to a higher-than-normal ratio of material to be processed from Mogalakwena in 2023, there will be a short-term constraint on the Anglo Converter Plant (ACP). This will result in a temporary build-up in PGM WIP inventory, resulting in lower refined PGM production in 2023 of 3.8 – 4.2 million PGM ounces. Refined production in 2024 should recover to 4.1 – 4.5 million PGM ounces.


..as it relies on benefits which may or may not be achieved from the P101 operational excellence programme, and the modernisation plans at Amandelbult.


The Mototolo/ Der Brochen project is aimed at extending the life-of-mine of the Der Brochen mine to beyond 30 years, by enabling mining further into the resource, while leveraging existing Mototolo infrastructure. Production from Mototolo / Der Brochen is expected to be maintained at around 250,000 PGM ounces per year. The execution of the project will begin in Q1 2022. The total capital investment is expected to be R3.9billion (c.US$245 million) in nominal terms.


In my view, the progressive tightening of environmental regulations and technology innovation surrounding the production of green hydrogen has led to and will continue to lead to, an irrevocable increase in PGM demand; coupled with the supply-side restraints, caused mainly by structural change in the mining mix, leading to lower reef grades. Furthermore, the PGM mining industry has been starved of expansion and ore reserve replacement capital for a number of years. This, with the likely reduction in PGM supply caused and the mounting energy crisis in South Africa will almost certainly cause a major price resolution in Platinum.

A decline in supply together with overwhelming demand is a formula for the creation of a ‘perfect storm’, as Platinum moves into an increasing market balance deficit, thereby stimulating PGM prices

In this regard, investment demand will likely be bolstered by the low platinum price currently and the overall positive fundamental outlook.

Auctus Metal Portfolios Pte Ltd

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