Amplats warns of cost impact of load shedding


Amplats warns of cost impact of load shedding

Published Date: 2019-12-11 | Source: Stephen Gunnion | Author: Stephen Gunnion

Amplats warns of cost impact of load shedding

The platinum producer says power outages make it even more likely it will miss its cost guidance this year.

Anglo American Platinum (Amplats) says costs are likely to be higher than forecast this year and the current bout of load shedding by Eskom could make them even steeper.

In an update released to coincide with an investor briefing by parent company Anglo American, the platinum producer maintained production guidance at 2.0-2.1 million ounces of platinum and 1.3-1.4 million ounces of palladium for the year to end December. However it raised its unit cost guidance from between R21,000 and R22,000 per platinum ounce produced to between R22,000 and R23,000. It said this could be further impacted by current power outages.

On Monday, Eskom implemented stage 6 load shedding for the first time, allowing for the removal of up to 6,000 megawatts from the national grid. It blamed technical problems at its new Medupi power station and heavy rains in Mpumalanga that left coal wet, while the mine that feeds its Kriel Power Station was flooded. Business Day reported that a number of other mines had to halt their underground operations and processing plants as a result of the unprecedented power cuts.

Amplats confirmed its platinum production guidance at 2.0-2.2 million ounces for next year and 2021 and said palladium production would likely be at the top end of previous guidance of 1.3-1.4 million ounces.

Its shares rose 2.3% to R1,297.24 yesterday.

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