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Amplats says power cuts cost it 3% of PGM output this year

Kitco News

* World's biggest PGM miner cuts output forecast for 2023/24

* Eskom power cuts knock nearly 3% off 2022 refined production

* Amplats flags rising costs driven by higher energy prices

(Recasts with CEO on impact of power cuts)

By Nelson Banya Dec 9 (Reuters) - Anglo American Platinum has lost 105,000 ounces in platinum group metals (PGM) production this year, or nearly 3% of its total refined output, due to power cuts in South Africa, chief executive Natascha Viljoen said on Friday. South African power utility Eskom on Wednesday ratcheted up scheduled power cuts to "Stage 6", the worst outage level on record, as its ageing fleet of coal-fired power stations continues to suffer breakdowns.

Viljoen said although Eskom had a "load curtailment" arrangement with miners, which seeks to minimise the impact of power cuts, the recent intensification of outages had put a strain on operations. "The curtailment that we've seen over the last number of weeks is more than we have flexibility in the system for and we have seen more impact on the operations," Viljoen said in a call after the company's annual production update.

Amplats cut its production forecast for 2023 and 2024 due to lower grades at its Mogalakwena operations and lower volumes from Amandelbult, but 2022 output remained within target. The company said refined PGM output for 2023 and 2024 was now expected to be between 3.6 million and 4 million ounces, lower than the initial guided range of 3.8 million to 4.2 million ounces for 2023 and 4.1 million to 4.5 million in 2024.

The company also revised its 2022 cost guidance up to 15,300 rand ($892.62) per PGM ounce from 14,000-15,000 rand. "Unit cost of production in 2022 has been impacted by ongoing inflationary pressure on input costs due to higher diesel, fuel, and consumable prices owing to the effects of COVID-19 on supply chains, import logistics constraints, Eskom load-shedding, as well as lower production," Amplats said. Mogalakwena and Amandelbult are in north eastern South Africa. ($1 = 17.1405 rand) (Reporting by Nelson Banya; Editing by Jane Merriman and Mark Potter)

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