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Global decarbonisation rapidly upping demand for Anglo Platinum products

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Global decarbonisation rapidly upping demand for Anglo Platinum products

Anglo American Platinum's Mogalakwena platinum mine in Limpopo.

22nd February 2021

By: Martin Creamer
Creamer Media Editor

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JOHANNESBURG (miningweekly.com) –  Platinum group metals mining and marketing company Anglo American Platinum said on Monday that it was poised to deliver the next phase of value for its stakeholders as decarbonisation efforts increase the long-term demand for its metals.

“We are grounded in our purpose to re-imagine mining to improve people’s lives. Delivering on our strategy will create value for our stakeholders and help ensure a safer, cleaner and smarter future,” Anglo American Platinum (Amplats) CEO Natascha Viljoen stated in a release to Mining Weekly.

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“Climate change is rapidly accelerating global decarbonisation efforts, which will increase the long-term demand for our metals. We are therefore strongly focused on leveraging our capabilities across our value chain to lead technology deployment and market development for our products,” Viljoen said.

Against that backdrop, the portfolio of the Johannesburg-listed company provided what Viljoen described as a strong platform for growth “from our diverse, low-cost and long-life mining and processing assets”.

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Central to what the company did, she said, were its firm commitments to delivering safe, responsible and reliable production, together with building thriving local communities and maintaining a healthy environment.

“We will achieve this through our goal of delivering industry leading returns through value-focused capital allocation,” Viljoen added.

STRATEGIC PRIORITIES

Anglo American Platinum is focused on:

  • stimulating new markets and leveraging new capabilities through market development activities to increase and broaden demand while capturing value from adjacent value chain opportunities;
  • embedding anti-fragility across the business to increase the resilience of its operations and enable value creation initiatives;
  • maximising value from its core assets which will be in the first half of the cost curve - the company described itself as owning diverse, quality and long-life mining and processing assets with the optionality to grow high margin, high returning ounces in a disciplined manner; and
  • being an environmental, social and governance (ESG) leader through developing trust as a corporate leader, building thriving communities, and maintaining a healthy environment. The company described ESG as being core to its strategy and way of working, including its capital allocation framework.

VALUE CREATION

Amplats expressed the view that delivering on these strategic priorities would increase production by 20% from its mines and joint operations, from three-million ounces currently to 3.6-million ounces in 2030, while improving margins and returns from the business.

It stated that this would be achieved through operational excellence as well as its disciplined, balanced capital allocation approach, which was focused on maintaining balance sheet strength, value added growth and an attractive return to shareholders.

It expressed commitment to the pay-out of a base dividend of 40% of headline earnings, and a disciplined approach to discretionary capital, looking at the highest returns through portfolio upgrade, breakthrough technology, project growth options, ESG opportunities and additional returns to shareholders.

KEY TARGETS

The company’s key targets include:

  • 100% of its operations being fully modernised and mechanised by 2030;
  • all of its mine operations being in the first half of the primary cost curve by 2025;
  • its mining margin being 35-45% of earnings before interest, taxes, depreciation and amortisation by 2030;
  • a through-the-cycle return on capital employed of at least 25%;
  • support for the creation of five jobs off site for every one on site by 2030; and
  • a net reduction in carbon dioxide emissions of 30% by 2030 and being carbon neutral in scope 1 and 2 emissions by 2040.

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