Amplats CEO Chris Griffith. Picture: MARTIN RHODES
Amplats CEO Chris Griffith. Picture: MARTIN RHODES

ANGLO American Platinum plunged into a heavy loss for its 2015 financial year, with R14bn in impairments and a further R1.1bn to cut jobs. The company also outlined the indefinite suspension of its Twickenham mine.

All of Amplats’ mines had generated cash during the year and produced R4bn in free cash flow, reducing net debt to R12.8bn from R14.6bn at the start of 2015, said CEO Chris Griffith.

Refined platinum production increased to 2.46-million ounces from 1.89-million ounces the year before, with the company’s own mines increasing output to 2.34-million ounces from 1.87-million ounces.

However, the impairments and restructuring costs pushed the company deep into the red. Amplats, which is 80% owned by Anglo American, posted a loss of R12.13bn for the 12 months to end-December compared with a R624m profit the year before.

Amplats will put its Twickenham mine into care and maintenance. The mine, which is a project in development rather than an operating asset, sustained a loss of R500m during the year.

The decision was to mothball the project at a cost of about 1,000 jobs and keep the mine on ice, with its large resource and mechanised mining method, retaining it in the portfolio for when the platinum market needed additional ounces, Mr Griffith said.

The Union mine, which has been put up for sale, has cut production by half to 120,000oz and made free cash flow during the year. It could be mothballed if no buyer were found by the middle of this year, he said. However, he did concede Amplats would be unlikely to mothball profitable production.

Amplats also wants to exit its 50% stake in the Kroondal joint venture with Aquarius Platinum, the company Sibanye Gold is buying.

Sibanye is buying the Rustenburg assets owned by Amplats and there are synergies between these mines and Kroondal.

The 50% stake in the Kroondal joint venture is held within Amplats and not the Rustenburg assets. Mr Griffith said Amplats would sell the stake, with Sibanye being the obvious buyer, but the sales process was open to all comers.

He did not give a time line for the sale.

Amplats withheld its annual dividend, citing its net debt position and future funding requirements.

At 9.11am, the Amplats share price had risen 4.23% to R281.14, valuing the company at about R72.7bn.