Anglo Platinum to Increase Output on Bullish Demand Outlook
(Bloomberg) -- Anglo American Platinum Ltd. plans to increase its mine output by about a fifth over the coming decade, while seeking to stimulate demand for the platinum-group metals it produces.
Amplats, as the company is known, is targeting a 20% jump in production to about 3.6 million ounces by 2030 as it mechanizes mines in South Africa. The increase would mainly be driven by an expansion of its giant Mogalakwena operation.
That development comes as investors debate the long-term outlook for PGM supply and demand, weighing the potential boost to platinum consumption from new hydrogen technologies against a shift to electric vehicles. In the short term, tougher pollution regulations requiring vehicle makers to use more platinum in catalytic converters have helped boost the metal by 19% this year.
Chief Executive Officer Natascha Viljoen expects prices to remain robust in 2021, even as Amplats sees the platinum market returning to a surplus. Platinum is also being supported by potential demand from hydrogen applications, the CEO said.
“I honestly am quite bullish about the future of our metals,” Viljoen said in an interview. “If you consider the momentum we have seen in battery electric vehicles and fuel cells, we believe the future lies in a mixed drive train where platinum certainly plays a significant role.”
Amplats may boost output at Mogalakwena by 300,000 to 600,000 ounces over the next 10 years. Board approval for the expansion that could cost as much as 23 billion rand ($1.5 billion) will likely be granted by the end of the year, the CEO said. It also plans to increase production at Amandelbult, while extending the life of the Mototolo mine.
Despite the pandemic and disruptions to its processing plants, the unit of Anglo American Plc posted record earnings before interest, taxes, depreciation and amortization last year as palladium and rhodium prices soared.
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