It has been an exceptionally
challenging year from both operating and financial perspectives.
I am pleased to report on the continued growth in production
that resulted in increased profits, albeit including a once-off
extraordinary item in the form of the sale of the Waterval
mineral rights to Anglo Platinum.
Highlights of the year include:
the turnaround at Kroondal - still one of the most productive
and lowest cost operations on the Bushveld Complex;
the successful expansion at Mimosa, one of the lowest
cost producers in the world; and
the announcement and progress with AQP(SA)’s BEE
deal that will see Aquarius Platinum complying with the
equity component of the new South African minerals legislation,
well ahead of its competitors.
On the negative side, operations at the Marikana mine proved
to be more challenging than anticipated owing to both geological
and abnormal weather conditions.
In South Africa, the continued strength of the rand prevailed
and is set to be an ongoing factor in our lives. We have taken
active steps to counteract the erosion of our margins by focusing
on costs and productivity – and in so doing will be
in an even stronger position in the future as these factors
return to normality.
Fortuitously, in the previous financial year, we looked
inwardly, and acknowledged and addressed the relative youth
and inexperience of our technical team. Our recruitment of
Gert Ackerman to the management team as Managing Director
of AQP(SA) has paid enormous dividends. His 33 years of experience
gained in South Africa’s platinum mining sector has
brought the additional focus we needed to meet the various
demands arising in our operations and projects.
The overall price for the basket of Platinum Group Metals
(PGMs) we produce increased by 19% in dollar terms in the
year under review. Platinum continued to be the primary revenue
driver, with international growth in demand continuing to
exceed supply. Our received platinum price rose by 29% in
dollar terms year-on-year, and while there has been some encouraging
strengthening in the prices of both palladium and rhodium
in recent months, the received averages for the year languished
13% and 5% respectively below those for the previous year.
Autocatalysis continued to drive international demand for
platinum, and and this was underpinned by sustained consumption
in the jewellery sector, particularly in the key Chinese market.
Around the world, people clamour for clean air; legislators,
increasingly, are listening and legislating accordingly. These
trends, together with growing demand globally – and
in China particularly – for vehicles that are more fuel-efficient
in the face of rising oil prices, and a universal move towards
diesel, are good news for PGM producers like us. They point,
quite simply, to ever-stronger demand for autocatalysts, be
they either platinum or palladium-based. Indeed, a greater
research focus on the application of palladium in autocatalysis
augurs well for a strengthening in the palladium market and
of the price in the medium to longer-term.
