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Bertus de Villiers

CAPITAL EXPENDITURE 2012
R760m

FURNACE MATTE PRODUCED
(2011: R211.4 kt)
185 kt

 

 

    2012 2011
Safety      
  Fatalities   0 0
  LTIFR   0.58 0.62
Tonnes smelted (Mt)

 

1.15 1.22
Cash costs/tonne new concentrate smelted (R)   2,004 1,671

Anglo American Platinum operates three smelting complexes, namely the Mortimer, Waterval and Polokwane smelters. Concentrate received from the concentrators operated by the Company, joint-venture partners and third parties is smelted at the smelters, producing furnace matte. The matte is then treated using the Anglo American Platinum Converting Process (ACP), which is carried out at the Waterval Smelter complex in Rustenburg. The converter matte tapped from the converter is then slow-cooled, crushed and despatched to Anglo American Platinum ' Rustenburg Base Metals Refiners for further processing.

During 2012, scheduled furnace maintenance was carried out on the Polokwane furnace and on the ACP.It is pleasing to report that the Polokwane Smelter's matte end-wall continues to show significantly reduced wear following the design modifications made in 2010, and inspection intervals have thus been increased to 18 months. The commissioning of the ACP after its extended annual shutdown was followed by a period of excessive accretion formation in the gas uptake of the converter, and this negatively impacted the converter's throughput for the first four months of the year. Following this setback, a major effort to de-bottleneck the operation resulted in record throughputs being achieved in July and August and the production unit is now de-bottlenecked for sustainably higher continuous throughputs.

In 2012, the Mortimer Smelter's furnace and auxiliary equipment successfully achieved the planned interim ramp-up target of 34 MW operation, en route to ultimate 38 MW operation.

Operational stability at the ACP and the availability of the acid plant ensured that sulfur dioxide emissions from the Waterval Smelter complex remained within prescribed limits. Environmental compliance was also achieved at the Polokwane and the Mortimer smelters.

SAFETY

Overall in 2012, our smelting operations achieved a year-on-year reduction in total injuries of 29%. The total injury-frequency rate (TIFR) was 1.21 against an industry benchmark of 2.0, but the lost-time injury-frequency rate (LTIFR) was 0.58.

On the journey towards zero harm, the smelters have aligned all their operations with Anglo American plc's safety, health and environment strategy.

PRODUCTION

Smelting operations smelted 6% lower concentrate tonnes than in the prior year, mainly because of the industrial action during the latter part of 2012.

The smelters continued to treat excess ACP converter slag stockpile through the slag mill plant, resulting in the substantial recovery of precious metals and a significant release of stock. This was performed to mitigate the effects of the ongoing deferment of slag-cleaning furnace No 2. On-going asset-optimisation initiatives improved furnace reliability and operating efficiency during the year.

Platinum ounces produced in the form of converter matte decreased by 4% to 2.39 million ounces owing to lower grades and mining production.

COSTS

The smelter cash operating costs (including toll smelting costs) increased by 13%. Included in this increase is the additional spend of operating the Mortimer smelter at higher throughput rates associated with the capacity increase project. In addition, the substantial annual increase in power costs, which represents a primary cost within the smelters, has further impacted operating cash flows. Costs were, however, contained through internal cost management interventions which among others included the extension of equipment maintenance intervals. The unit cash cost per tonne of new concentrate smelted, however, increased by 20% year-on-year, as a result of a decrease in the tonnes received and treated. Accordingly, the unit cash cost per 4E ounce despatched increased by 11% to R356, also largely as a result of lower volumes treated.

Capital expenditure

A total of R760 million was spent on capital for the year (against R823 million in 2011). Of this amount, R473 million was spent on project capital, which included the slag-cleaning furnace No 2 expansion project at Waterval Smelter (R396 million).

Stay-in-business capital of R287 million was spent mainly on the replacement of the sidewalls and end walls of furnaces No 1 and No 2 at Waterval Smelter (R74.3 million); the increase in matte receiving and despatch capacity (R37.6 million); and future SO2 abatement at the Polokwane and Mortimer smelters (R43 million).

PROJECTS

Slag-cleaning furnace No 2

During 2012 this project was deferred indefinitely.

OUTLOOK

Through asset-optimisation and continuous-improvement initiatives, the smelting operations are expected to further reduce unplanned furnace downtime, capital inefficiencies and unit costs in 2013. In order to process higher matte fall concentrates, initiatives to prevent bottlenecks will be carried out at the matte-handling facility of the Polokwane furnace, the Waterval Smelter's slag-milling plant and the ACP facilities.