Precious metals group Anglo American Platinum (Amplats) has cut its refined production guidance by as much as a double-digits after it detected the delivery of sub-standard materials for its Polokwane smelter rebuild, an issue that is expected to result in a two-month delay.
Refined production guidance for platinum group metals (PGMs) has been cut to between 3.7-million and 3.9-million ounces from as much as 4.4-million previously, Amplats said in a statement, although unit-cost guidance remains unchanged.
This represents a fall of 11.36% for the upper-end of its range, with the miner saying this is also subject to revision due to load shedding, which resumed this week. The miner had intended to rebuild the smelter, its first since commissioning, during in the three months to end-September.
"As we undergo our first full rebuild of the Polokwane smelter in twelve years, our quality assurance processes identified a defective consignment of materials required to complete the rebuild," CEO Natascha Viljoen said in a statement.
"We remain committed to ensuring the structural integrity of our Polokwane smelter, with high standards embedded into the rebuild to ensure asset integrity and the longevity of this operation. We will not compromise on safety or quality and therefore the defective materials will not be used, and a new consignment of materials is expected to be delivered by the end of October."
By Thursday late morning, the group's shares lost almost 5% to R1 157.12.