|(2011: 2.5 Moz)|
BASE METAL PRODUCTION
|(2011: 24.4 kt)|
Process operations have maintained their momentum of implementing the processing strategy from the previous years, which is in part driven by the mining strategy. Operating efficiencies in the treatment of UG2 and Platreef ore types remained an area of continued focus during the year and gained further significance as ore delivery was constrained as a result of the impact of the industrial action. A drive to improve the reliability of key process equipment, especially furnaces, has further contributed to the continued improvement in operating performance.
Refined production at 2,336,158 platinum ounces was a 6.7% reduction on 2011. This was largely the result of the industrial action experienced in the Rustenburg, Amandelbult and Union sections during the last quarter. Ore milled by own operations decreased by 6% year-on-year to 35.4 million tonnes, while the concentrator at Unki in Zimbabwe exceeded nameplate capacity. At the non-managed operations the year-on-year reduction of 12% in tonnes milled down to 3.2 million tonnes was largely owing to the Marikana plant being placed on care and maintenance.
Overall built-up head grade for managed operations reduced by 1% to 3.14 g/t 4E year-on-year, because of the reduction in Merensky and UG2 ore streams received from mining operations following the industrial action. Built-up head grade performance was further eroded by an increase in the percentage of Platreef and Zimbabwean ore streams treated, though these ores have a strategic advantage of low-cost mining and can be expanded relatively quickly.
Maximising the revenue generated per tonne of ore processed
Improvements in recovery achieved over 2008 to 2011 have been maintained in 2012, on the back of advanced control technologies and the optimisation of the stirred milling projects on both mainstream and intermediate concentrate regrinding. The chrome recovery plant in Rustenburg was successfully completed during 2012. Commissioning of the expansion of the Rustenburg Base Metal Refinery continued and it is expected to achieve steady-state capacity in 2014.
Minimising the cost of processing per tonne of ore processed
During the year process operations underwent a divisional cost review that focused on applying best-in-class activities across all operations. Through the entire value chain, potential savings were identified going forward, which included a 29% reduction in outsourced services coupled with a 47% reduction in rental of equipment costs. Labour structures were also reviewed across all operations and among the optimisation initiatives the planned reduction of labour hire is approximately 79%.
Maximising capital efficiency
Amplat’s recently announced production profile indicates excess smelting and refining capacity in the short to medium term. In order to exploit unused installed capacity, it is planned to continue the practice of treating recycled material. Platinum ounces from recycled feed almost doubled in 2012 from the prior year and further reliance will be placed on this input source going forward.
Construction on the Mogalakwena North plant to de-bottleneck, will realise significant capacity benefit within the next two years by increasing its capacity from the current 600 ktpm to 750 ktpm at minimal incremental capital cost. Ramp-up of the Mortimer Smelter
to an interim 34 MW was successfully achieved as planned. The ACP operation was de-bottlenecked, achieving record throughputs in July and August of almost 5% above the previous best monthly performance. The BMR ramp-up is scheduled to reach steady-state performance during 2014. The PMR continues to de-bottleneck capacity-constrained areas. These efforts avoid future capital, but also improve installed asset utilisation.
|The ACP operation was de-bottlenecked, achieving record throughputs in July and August of almost 5% above the previous best monthly performance.|
Our business is an energy-intensive one, but we are committed to developing and investing in projects that optimise our energy use, benefit our operations and improve our environmental impact.
Over the years, Amplats has become a leader in saving and re-using energy. A more recent project joining the mix of successful initiatives in this area is our “thermal harvesting” project, which involves the Amplats Converting Process plant based at our Waterval Smelter complex in Rustenburg.
This time around, the Company has invested around R107 million in an independent power producer (IPP) that will be helping it to recover its waste heat energy. The introduction of private-sector power generation has multiple benefits, including job creation, reducing the financial burden on the state and improving supply and pricing. With funding from Investec Bank and development finance from the Department of Trade and Industry, this is a collaborative project that will provide long-term benefits for our business and the wider community.
The project focuses on extracting waste heat from the high-pressure water system used to cool the converter off-gas in the ACP, something that was previously carried out using air-based fin-fan coolers. However, by implementing an innovative, closed system, the organic Rankine cycle technology will harvest the waste heat and feed electrical energy created by the IPP into the grid.
The high-pressure water exchanges heat with an organic medium converted to a vapour. The organic vapour is used to drive a turbine, converting heat energy to electrical energy. The cooler high-pressure water is returned to the converter and the organic vapour is condensed in the closed circuit and reused.
The plant will be commissioned in June 2014, and the length of the agreement signed by Amplats with the IPP is 15 years.
This new approach harvests 20 MW in thermal energy and returns approximately 3.75 MW in electrical energy to the electrical grid. As a result of this, the potential saving on carbon emissions is approximately 19 kt CO2e per year, resulting in reduced exposure to carbon tax of just under R27 million. The total cost of energy saved over the 15 years is expected to be R13.4 million.
This development is an example of how alternative funding models can be used effectively in our industry; and of how “thinking long-term” can deliver benefits that are in fact immediate.
Concentrator operations experienced a decline in safety performance, with a tragic loss of life at Klipfontein in May. In addition, 23 lost-time injuries occurred during the year. Concentrator management remains committed to a zero harm mindset and this goal ultimately underpins all decision-making and operational activities. Learnings from previous incidents and innovative safety campaigns show many excellent results, with the following plants achieving commendable safety landmarks:
- The Mototolo concentrator plant achieved 414 days without a lost-time injury.
- The Divisional Metallurgical Laboratory celebrated 18 years without a lost-time injury.
- The Union Concentrator Mortimer UG2 Plant achieved one year without a lost-time injury.
- The Rustenburg section Waterval Plant reached 832 days without a lost-time injury.
- The Mogalakwena section North Plant achieved 591 days without a lost-time injury at the close of 2012.
Tonnes milled by own operations in 2012 decreased by 6% year-on-year, to 35.4 million tonnes. This was largely the result of the industrial action experienced in the Rustenburg, Amandelbult and Union sections during the latter part of the year. The concentrator at Unki in Zimbabwe continued with production ramp-up and showed an increase in tonnes treated against the previous year’s total. Some improvement was also shown at the Mototolo Concentrator operations. The Union section concentrators started with the treatment of tailings tonnes through Ivan Concentrator, which assisted in the replacement of the depleted waste-rock ore-stream. The Marikana plant was decommissioned during the year, which was the largest contributing factor towards the year-on-year reduction of 12% in tonnes milled at non-managed operations, to 3.2 million tonnes. Together with reduced throughput at the managed concentrators, this resulted in a combined decrease in tonnes treated by total operations of 7% year-on-year.
Overall built-up head grade for managed operations reduced by 1% to 3.14 g/t 4E year-on-year, with an increased proportion of Platreef and Zimbabwean ore streams treated. Together with various asset optimisation projects targeted at recovery improvements, the continued operation and optimisation of IsaMill™ stirred milling technology remained a critical factor in mitigation of the reduction in recovery that would normally be associated with an increase in the treatment of materials with lower recovery potential. Consequently, the year-on-year recovery performance remained stable.
Attributable platinum contained in concentrate produced for the year totalled 1.7 million ounces.
Cash operating costs were 3% higher than in the previous year. This below-inflation increase can be attributed to savings incurred during the industrial action and to various asset-optimisation initiatives aimed at promoting cost efficiency and effective cost containment. Among these initiatives was the move from outsourced to in-house maintenance with a view to improving operating efficiencies. Associated with this is the ongoing management of key commodity consumption indicators that contribute materially to the overall spend. The reduced throughput, however, resulted in the unit cost per tonne milled increasing by over 12% year-on-year, to R135 per tonne.
Capital expenditure decreased by 35% to R516 million, with R357 million spent on stay-in-business capital expenditure and the balance of R159 million spent on expansion projects. De-bottlenecking at the Mogalakwena North Concentrator contributed R63 million to the total project capital spend, while further project capital was spent on the construction of the IsaMill™ at the Union concentrator plant (R33 million); the remining of the Waterval tailings dam as part of the Western Limb tailings
retreatment project (R36 million); and improvements on the Unki Concentrator (R11 million).
The commissioning of the chrome-recovery plant (CRP) at the Waterval concentrator complex in the Rustenburg mining area was successfully completed during the year. Plant ramp-up and optimisation continue, and output is expected to reach design capacity in the early part of 2013.
The retrofitting of the Merensky plant at the concentrators in the Amandelbult section area to treat UG2 ore, thereby increasing the available capacity while optimising recovery performance, will continue into 2013. Construction on the Mogalakwena North plant de-bottlenecking project continues, with significant capacity benefit to be realised within the next two years.
| Attributable platinum contained in concentrate produced for the year totalled 1.7 million ounces. |
|FURNACE MATTE PRODUCED|
|(2011: 211.4 kt)|
Amplats operates three smelting complexes, namely the Mortimer, Waterval and Polokwane smelters. Concentrate received from the concentrators operated by the Company, joint-venture partners and third parties is smelted at the smelters, producing furnace matte. The matte is then treated using the Amplats Converting Process (ACP), which is carried out at the Waterval Smelter complex in Rustenburg. The converter matte tapped from the converter is then slow-cooled, crushed and despatched to Amplats’ Rustenburg Base Metals Refiners for further processing.
During 2012, scheduled furnace maintenance was carried out on the Polokwane furnace and on the ACP.
It is pleasing to report that the Polokwane Smelter’s matte end-wall continues to show significantly reduced wear following the design modifications made in 2010, and inspection intervals have thus been increased to 18 months. The commissioning of the ACP after its extended annual shutdown was followed by a period of excessive accretion formation in the gas uptake of the converter, and this negatively impacted the converter’s throughput for the first four months of the year. Following this setback, a major effort to de-bottleneck the operation resulted in record throughputs being achieved in July and August and the production unit is now de-bottlenecked for sustainably higher continuous throughputs.
In 2012, the Mortimer Smelter’s furnace and auxiliary equipment successfully achieved the planned interim ramp-up target of 34 MW operation, en route to ultimate 38 MW operation.
Operational stability at the ACP and the availability of the acid plant ensured that sulfur dioxide emissions from the Waterval Smelter complex remained within prescribed limits. Environmental compliance was also achieved at the Polokwane and the Mortimer smelters.
Overall in 2012, our smelting operations achieved a year-on-year reduction in total injuries of 29%. The total injury-frequency rate (TIFR) was 1.21 against an industry benchmark of 2.0, but the lost-time injury-frequency rate (LTIFR) was 0.58.
On the journey towards zero harm, the smelters have aligned all their operations with Anglo American plc’s safety, health and environment strategy.
Smelting operations smelted 6% lower concentrate tonnes than in the prior year, mainly because of the industrial action during the latter part of 2012.
The smelters continued to treat excess ACP converter slag stockpile through the slag mill plant, resulting in the substantial recovery of precious metals and a significant release of stock. This was performed to mitigate the effects of the ongoing deferment of slag-cleaning furnace No 2. On-going asset-optimisation initiatives improved furnace reliability and operating efficiency during the year.
Platinum ounces produced in the form of converter matte decreased by 4% to 2.39 million ounces owing to lower grades and mining production.
The smelter cash operating costs (including toll smelting costs) increased by 13%. Included in this increase is the additional spend of operating the Mortimer smelter at higher throughput rates associated with the capacity increase project. In addition, the substantial annual increase in power costs, which represents a primary cost within the smelters, has further impacted operating cash flows. Costs were, however, contained through internal cost management interventions which among others included the extension of equipment maintenance intervals. The unit cash cost per tonne of new concentrate smelted, however, increased by 20% year-on-year, as a result of a decrease in the tonnes received and treated. Accordingly, the unit cash cost per 4E ounce despatched increased by 11% to R356, also largely as a result of lower volumes treated.
A total of R760 million was spent on capital for the year (against R823 million in 2011). Of this amount, R473 million was spent on project capital, which included the slag-cleaning furnace No 2 expansion project at Waterval Smelter (R396 million).
Stay-in-business capital of R287 million was spent mainly on the replacement of the sidewalls and end walls of furnaces No 1 and No 2 at Waterval Smelter (R74.3 million); the increase in matte receiving and despatch capacity (R37.6 million); and future SO2 abatement at the Polokwane and Mortimer smelters (R43 million).
Slag-cleaning furnace No 2
During 2012 this project was deferred indefinitely.
Through asset-optimisation and continuous-improvement initiatives, the smelting operations are expected to further reduce unplanned furnace downtime, capital inefficiencies and unit costs in 2013. In order to process higher matte fall concentrates, initiatives to prevent bottlenecks will be carried out at the matte-handling facility of the Polokwane furnace, the Waterval Smelter’s slag-milling plant and the ACP facilities.
|Platinum ounces produced in the form of converter matte decreased by 4% to 2.39 million ounces owing to lower grades and mining production.|
RUSTENBURG BASE METAL REFINERS
RUSTENBURG BASE METAL REFINERS
The main function of Rustenburg Base Metals Refiners (RBMR) is the separation of precious metals from base metals using milling and magnetic concentration (MC) at the MC plant. This magnetic fraction is upgraded further through a three-stage leaching plant, to produce a final concentrate of 60% PGMs that is then fed to our Precious Metals Refinery (PMR). The non-magnetic fraction is refined at our Base Metals Refinery (BMR), to produce the base metal products, namely nickel and copper cathode, cobalt sulphate and a sodium sulphate by-product.
In the year under review RBMR had a slight reduction in its year-on-year lost-time injury-frequency rate (LTIFR), from 0.74 to 0.71. However, a marked 39% reduction in total injuries was achieved for 2012. The MC plant also significantly achieved two years without a lost-time injury.
Following a spate of injuries and incidents in the first half of the year, the “SAFELY TO 33,000” safety campaign was introduced, which aims to improve safety performance during the site ramp-up and optimisation to 33 ktpa nickel cathode capacity. The campaign is supported by continued focus on a zero harm mindset, implementation of mission-directed work teams and the practice of visible felt leadership. As a result safety performance improved dramatically in the second half of the year.
Platinum production decreased by 7.7% (192,000 ounces) to 2,312,184 ounces as a result of industrial action in our mines in the latter part of the year. Technical difficulties associated with the integration of certain new processes and equipment delayed the ramp-up of the expanded base metals refinery, resulting in a decrease of 17% in base metal production, to 20.3 kt. Toll treatment, initiated during the construction phase, continues to redress base metal production capacity shortfall during the commissioning.
Cash operating costs for 2012 increased by 14% or R139 million over the 2011 figure, to R1,114 million. Included in this increase are costs associated with the ramp-up of the BMR coupled with cost increases driven by higher-than-inflation price increases on key commodities. This, together with significant drop in volume, resulted in the cash cost per platinum ounce going up from R389 in 2011 to R482 in 2012.
The lower base metal production rate contributed significantly to the sharp increase in base metal unit costs. Cash cost per base metal tonne (which includes PGM separation costs) increased by R15,003 to R54,863, which was 38% higher than the cost in 2011.
Capital expenditure was R194 million, of which R149 million was for stay-in-business expenditure and R45 million for expansion projects. All expansion capital was associated with the expansion of the Base Metals Refinery to a nameplate capacity of 33 ktpa nickel cathode.
Base Metals Refinery (BMR) expansion project
The objective of the BMR expansion project is to expand the refinery’s nickel production capacity from 21.5 to 33 ktpa nickel cathode. The project makes allowance for the corresponding increase in copper cathode production as well as the concomitant increase in the production of cobalt sulphate and sodium sulphate. The expansion is being achieved through changes to the process technology, the reuse of existing assets and the installation of new equipment. The BMR expansion project ramp-up continued in 2012 and final completion will be contingent on available nickel input.
Looking ahead, the RBMR mantra remains SAFELY TO 33,000. The key priority remains achieving design nameplate capacity safely. The drive to improve operating efficiencies in terms of safety, costs and recoveries remain central to the success of the business.
PRECIOUS METALS REFINERS (PMR)
PRECIOUS METALS REFINERS (PMR)
Precious Metals Refiners (PMR) receives final concentrate from RBMR. The concentrate is refined into the respective PGMs and gold, to high degrees of purity. PMR’s products are customised to meet market requirements.
PMR has a sound safety record and has operated consistently for many years without any fatal accidents. In 2012, it had four lost-time injuries (compared with six in 2011). It continues to implement a comprehensive safety improvement plan focusing on procedures and risk assessments, and on a zero harm mindset. A safety reward and recognition system has also been implemented, to acknowledge exceptional safety actions and behaviour.
Platinum salt sensitivity (PSS) and rhodium salt sensitivity (RSS) are major health risks at PMR. To mitigate these risks, the operation continued to implement world-class occupational and environmental exposure control standards that allow for characterisation of the workplace for PSS and RSS and also to ensure that regular measurements are taken to monitor changes in the workplace and its people.
PMR’s 2012 refined production decreased by 6.7% or 168,391 ounces over production in 2011, to 2,336,158 platinum ounces. This was the result of reduced inputs into the PMR following industrial action in the latter part of the year. Emphasis was placed on de-bottlenecking and improving processing rates for palladium and ruthenium as part of asset-optimisation projects, and these aims were realised. Prominence was also given to the reduction of overall platinum inventory and increasing recovery. Pipeline optimisation led to some release of metal additional to that received in the year.
PMR strives for customer satisfaction on precious metals sold, constantly achieving the required purity specifications of 99.99% platinum and 99.98% rhodium. This has been achieved by implementing quality checks at various points in the process.
As the result of above-inflation-related price increases on key input commodities and maintenance costs, PMR’s cash operating costs for 2012 increased by 6.6% or R34.8 million to R564 million when compared with those for 2011. Linked to this and reduced production volumes, the cash cost per refined platinum ounce increased by 14.3% to R242 year-on-year.
Total capital expenditure decreased by 11% to R47.2 million when compared with that for 2011. Expenditure was attributable partly to the required replacement or upgrade of “end-of-useful-life” equipment, as well as the de-bottlenecking of capacity.
PMR effluent-treatment project
The PMR effluent-treatment plant, which involved the installation of a mixed salt crystalliser, a two-stage calcium removal circuit and conversion of a double-effect evaporator to a triple-effect crystalliser, is commissioned and operational, and has successfully undergone a series of performance tests during the year. The purpose of the plant in the long term is to reduce, and eventually eliminate, the requirement for effluent dams, ultimately leading to the early rehabilitation of dams. The plant was partly turned down in the middle of 2012, as part of a short-term cost-saving strategy.
Given the high fixed-cost nature of the operation, coupled with the projected curtailed demand for metals into market going forward, cash containment will be a significant focus in order to manage the unit costs at acceptable levels.