Amplats Boosts 2Q PGM Sales Despite Weaker Output

South African metals mining company Amplats has reported a 14% increase in platinum group metals (PGM) sales for the second quarter compared to the previous year, even though production fell by 2% due to low grades and challenging ground conditions at several of its mines.

Amplats credited operational initiatives at the Amandelbult complex in South Africa for the positive results. The firm's refined PGM production rose by 7% year-on-year to 1.15 million troy ounces (toz).

While the company's own-managed mine metal in concentrate production fell by 3% year-on-year to 547,200 toz in April-June, it marked a 9% increase from the first quarter.

PGM production at Amandelbult increased by 7% to 157,600 toz, thanks to improved ore grades and better underground infrastructure. This increase partially offset the lower production figures at other units. Production at Mototolo, Mogalakwena, and Unki in South Africa dropped by 14% to 66,300 toz, 4% to 232,600 toz, and 7% to 54,700 toz, respectively.

Tragically, during the second quarter, two workers died at Amplats' Dishaba Mine, part of the Amandelbult complex. The fatalities led to a work stoppage across the mine, which is expected to reduce Amandelbult's 2024 metal in concentrate production by 5%.

PGM sales from production increased by 14% year-on-year to 1.27 million toz. Amplats attributed the rise in sales to higher refined production and the drawdown of finished goods. However, the increase in sales volumes was counterbalanced by significantly lower sales prices for PGMs, with the average second-quarter PGM basket price at $1,419/toz, down 18% from a year earlier.

The decline in the PGM basket price was driven by a 31% drop in palladium prices and a 37% decrease in rhodium prices. Platinum prices also fell by 2% over the same period.

Amplats stated that its production guidance for 2024 remains unchanged, though this could be affected by potential power supply curtailments by South African utility Eskom. The company's production numbers were adjusted to reflect the sale of Amplats' 50% interest in the Kroondal project on November 1.