World shortages to the rescue

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of protection against disruptions caused by Covid-19. Thelessons learnt from the Ebola outbreak in West Africa in 2014 served as a training ground, Ramon says.

The company’s responseto Covid 19has alsoshownhowcapable itis, she says. “We ’ve witnessed the strength of local participation at our assets , globally we’ve collaborated more closely withgovernments and portfolio has supported us during Prices of palladium and rhodium in particular are high because of the effect of SA’s strict lockdown By LYNETTE DICEY ● Anglo American Platinum, the world’s largest supplier ofplatinum group metals (PGMs),hada recordfinancialperformance in its2019 financialyear, whichenabled itto declare its first special dividend since 2001.

Thecompany hasfaced twosignificant challengesin 2020:thetemporary closureof acriticalprocessing plantforemergencyrepairs and the safe shutdown of operations to comply with Covid-19 lockdown regulations, whichmeant that,for aperiod,it couldnot produce any metal.

Despite thesedisruptions itmanaged to shut down,restart and ramp upits operations safely and has reported a strong performance in the interim period to the end of June. Benefiting from higher basket prices for its metalsand a weaker rand,the companyended theperiod withnetcash ofR11.3bn

6

TOP 100 COMPANIES AngloGold Ashanti A

Share price, daily (cents)

58,000

September 2015: R10,000 August 2020: R47,429

45,000 York, Australian and Ghana exchanges —and is inthe JSE top40 in dex,the FTSE/JSEresponsible investment index series (of the FTSE4Good index), theresponsible miningindex and the DowJones sustainability indices (now part of S&P Global Inc)

and the Bloomberg gender equal ity

32,000 19,000 index .

Ramonsays thebusinessis inex-

6,000

201920182017 2016 2020

host communities, and our diverse Graphic: Ruby-Gay Martin cellentshape, anditsfundamentals are vastlyimproving. “We ’vecome a long way inrecent years, simplifying

stoppages . ” strength asan industryto tacklealone, but

Butshesays thepandemichasshown it ’simportant thatwestartto addressthese glaring gaps across the world in public systemic issues.” health-care systems, andshone a light on so- AngloGoldAshanti isthe world’s thirdcietal inequality. largest goldproducer andthe largeston the

“The mining industry needs to ensure African continent, producing 33-million that itworks alongside governmentand civil ounces and employingmore than34,000 society to try to rectify this. This is, admitted- people. Itis listed on fourstock exchanges ly, a big challenge thatwill be beyond our around theworld —theJohannesburg, New our portfolio, bringingin lower-cost, longer-lifeproduction, andhavesignificantly strengthenedour balancesheet. “We ’re focused on safely improving our cash flows, especially in thestrong gold price environment, and are keeping to our strategy of tight cost and capital management.

“Reinvestment in our existing assets while we develop longer-term greenfield options are expected toenhance the returns

World shortages to the rescue

trajectory of our business,”she says. and declared an interim dividend of R2.8bn, or R10.23 a share . About 65% of demand forits metals is at present from the automotive industry to reduce emissions from internal combustion engines. Though theglobal automotive industrywasseverely affected by Covid-19 it hasmadea strongrecovery,almostreaching pre-pandemic levels in recent months with a good recovery in China, where monthly sales now exceed 2019 levels. PGM demand is also benefiting from Ropeshovel and haul trucks at work in the stricter vehicle emissionstandards in crucial Mogalakwena mine’s central pit. markets likeEurope and China,which require higher loadings of the metals in exhaust systems and h ave 7 TOP 100 COMPANIES helped to keep demand at historically high levels. Jewellery, anotherimporAnglo American Platinum A tant market forplatinum, also

Share price, daily (cents) September 2015: R10,000 suffered during the pandemic 150,000 August 2020: R43,357 but is recovering. Anglo American Platinum 115,000 iscontinuing todevelopthe 80,000 usesof PGMs—most notably in hydrogen applications —45,000 through industry partner10,000 ships and investments in

201920182017 2016 2020

Graphic: Ruby-Gay Martin ● Continued on Page 15

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companies through its funding of venture capitalfund APVentures.Supplyof PGMsis veryconcentrated,with 70%ofminedplatinum, 80% of rhodium and 40% of palladium produced in SA. The supply was materially affected by Covid-19, says CEO Natascha Viljoen. “Our estimate at this stage is that the overallimpactgloballywill bearounda16% reduction insupply, primarily due tothe initial national lockdown in SA.

“As aresult, wehave seenstrong prices forpalladium andrhodiumin particularthis year. ”

Prior to the pandemic, Anglo American Platinumwason ajourneytowardsdeveloping the mine of the future by deploying innovativetechnologies thatlower energyand water usage, create less waste, make its mines and processing operations safean d create value through the cycle.

“We ’ve made significant improvements in our safety record in recent years as well as real progress with our workplace HIV and TB treatment and awareness programmes, which has led to adrastic reduction in TB incidence ratesand TB-relateddeaths atour operations , ”reports Viljoen.

Another challenge is how to create longterm sustainable communities in the areas in which thecompany operates,ensuring local economies thrive beyond thelife of the miningoperations. Viljoensays:“Our effortsto build sustainable economiesbeyond mining includeinvestment inschoolsand othereducation programmesto helpdevelop skills, and supportinglocal entrepreneursthrough increased procurement from host community businesses.”

Viljoen took over as CEO in April this year from Chris Griffith, whostepped down after sevenyears inthe job.She saysthe recipefor the company’ssuccess hasbeen therestructuring andrepositioning of thebusiness over the past five years. Theoutlook for the company appears positive. In2019 it co-invested inLion BatteryTechnologies,which aimsto accelerate the developmentof next-generationlithium-air andlithium-sulphurbattery technologyusing platinumandpalladium. “We believe internal combustion engines, battery-electric vehicles and fuel cell electric vehicles will coexist in the market, with PGMs as acritical ingredient in allof them,” says Viljoen.

Sheaddsthat strongearningswillcontinue to bedriven by robust demandfor PGMs, combined withthe company’sfocus oninvestingin fast-paybackvalue-accretive projects, while implementing world-best- prac tice operations.

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