Anglo American Platinum (JSE: AMS), also known as Amplats, has temporarily shut down its Anglo Converter Plant, declared force majeure and cut its 2020 output.
The South African miner, the world’s top platinum producer, now
expects to churn out between 3.3 and 3.8 million ounces of platinum group
metals, 900,000 ounces short of its previous guidance of between 4.2 and 4.7
million ounces.
The company’s ACP phase A converter plant at the Waterval
smelter complex, in Rustenburg, was damaged after an explosion on February 10.
Amplats then started its second converter plant, which continued to have
inexplicable water presence, a dangerous situation when working with metals at
very high temperatures.
“This poses a high risk of explosion and the company has determined that it has no other option but to temporarily shut down the phase B unit, to ensure the safety of all employees, and avoid a catastrophic event,” it said in the statement.
Amplats expects the repair works on the phase B unit to take
about 80 days.
As a result of the temporary closure, the miner has had to
declare force majeure to customers, suppliers of third-party purchase of
concentrate and providers of tolling material.
The company, majority owned by Anglo American (LON:
AAL), noted that mine production will continue as usual, while smelting of
concentrate will be done at one of the four complexes it owns.
Amplats noted that output from its mines, as well as third
party material, will not be able to be converted to refined production while
the plant is undergoing repairs.
The news comes at time of global shortages of palladium and rhodium, used in catalytic converters attached to vehicle exhausts to reduce harmful engine emissions.
Tougher environmental regulations are forcing auto makers to
use more of those commodities, which are by-products of platinum and nickel
mining. This makes it difficult for companies to quickly increase production.