Amplats, a unit of Anglo American, said in a statement on Thursday that it had taken “the pre-emptive decision to close the Anglo Converter Plant (ACP) Phase B unit, following a series of water leaks, to ensure an ongoing safe operating environment, protect employees and protect the integrity of the plant and surrounding processing assets”.

This is a material development. In response to an emailed query, spokesperson Jana Marais said the expected hit on earnings before interest, tax, depreciation and amortisation (EBITDA) could be between R5-billion and R6-billion, depending on metal prices. Its EBITDA for 2019 was R30-billion. 

In its interim 2020 earnings unveiled in July, Amplats had an EBIDTA of R13.1-billion and paid a dividend of R2.8-billion. It had also paid R1.2-billion to employees who stayed home during the hard lockdown. It had net cash on its balance sheet at that time of R11.3-billion. 

The plant closure will change the goalposts for its 2020 expectations. 

“As a result of the closure of the ACP Phase B unit, the company has lowered its refined production and sales guidance for 2020 to 2.5-million PGM ounces (previously 3.1-3.3 million PGM ounces),” Amplats said. That is a decline of around 20% or more. 

The company has been plagued by plant problems. The same plant was shut in March because of water leaks and another plant is to be rebuilt after an explosion in February triggered by coal dust.  BM/DM