Anglo American Platinum’s local unit, Unki Mine, anticipates completion of its smelter project in the third quarter of 2018 and is expected to create employment and contribute towards economic growth.

The smelter has a total cost of R650 million.

On completion, Unki’s smelter should enhance value addition and increase foreign currency through export of processed minerals as opposed to their raw format.

Government has encouraged mining firms to establish refineries in the country and proposed a 15 percent tax on raw platinum exports in 2013.

Meanwhile, Unki’s platinum group metals (PGMs) production jumped 9 percent to a record 92 600 ounces in the half year to June 2018 on the back of a ramp up in tonnes milled.

Platinum production increased 8 percent to 41 000 ounces from 38 000 ounces in the same period last year.

Palladium production was 10 percent firmer to 36 200 ounces from 33 000 ounces achieved in the comparable prior year period.

During the period under review, tonnes milled increased by 6 percent on the back of throughput and recovery.

Unki has maintained its growth trajectory in the in the six months under review after it produced a record 165 900 PGM ounces for the full year in 2017 compared to 162 000 ounces in the prior year.

Four elements (4E) metal grade remained flat at 3,47g/t.

Unki increased economic free cash flow to R311 million from R85 million due to improved performance and the sale of treasury bills of R100 million.

EBITDA margin improved to 33 percent from 21 percent in the comparable prior year, while return on capital employed increased to 11 percent from 2 percent in the same period last year.

“The mine, being a dollar denominated operation, benefitted from the strengthening of the rand which increased 6 percent to R12,38 from R13,24.

“Cash operating costs increased by R35 million as ore stock ahead of the concentrator, which was built-up during maintenance at the concentrator in H2 2017, was depleted in full in H1 2018,” said Anglo American Platinum.

Total PGM production from Unki in 2018 is expected to increase slightly to 180 000 PGM ounces from 170 000 PGM ounces, including 80 000 platinum ounces – previously 75 000 ounces.

Overall, Anglo American Platinum’s PGM production in the period under review increased 4 percent on improved operational efficiencies across the own-managed mines portfolio and strong performance from joint ventures.

This was achieved despite the closure of two unprofitable productions.

The group achieved an EBITDA growth of 70 percent while return on capital employed increased to 22 percent from 9 percent in the prior year comparable period.