Anglo American Platinum Limited |
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Market development and beneficiation strategy
Manufactured capital
| 1,988 | 3,016 | 59% |
| platinum ounces sold | palladium ounces sold | consignment customers increase |
Manufactured capital refers to material goods and infrastructure owned, leased or controlled by an organisation, which contribute to its production or service provisions but do not become embodied in its output. Examples include tools, technology, machines, buildings and beneficiation.
INTRODUCTION
The platinum industry is market driven, and market development has been and remains central to Anglo American Platinum Limited's (Amplats) strategy. Within the market development framework, focus on local beneficiation is a core objective. Close collaboration between government and related businesses is a key enabler of beneficiation. Amplats works closely with government departments in brainstorming and implementing beneficiation plans. This has resulted in the implementation of numerous initiatives that aim to enhance local involvement in the downstream processing of PGMs.
Market development and beneficiation
The intended key outcome of our market development and beneficiation approach is to enable greater usage of PGMs by establishing a balanced pipeline of product development portfolios and facilitating the commercialisation of products.
Amplats participates in various ways in this space, with the expected outcomes being different for each, as follows:
- Fundamental research: blue-sky development of new applications for metals in a research programme, with the two main outcomes being access to the programme and its information, and the development of trained PGM scientists.
- Product development: scoping of product development opportunities per metal per application and/or the facilitation of development initiatives through the provision of funding and/ or other terms to enable development.
- Commercialisation: encouragement of product commercialisation by provision of resources and/or support to enable development, with the key outcomes being the creation of new metal demand and potential equity ownership.
In South Africa, these beneficiation opportunities arise across the spectrum of the market development scope. Amplats participates in beneficiation in the following ways:
- Investing in human capital by assisting local universities with student funding and support in fundamental research.
- Facilitating local technology transfer by engaging with key fabricators.
- Creating an enabling environment for product and business development by facilitating commercialisation through the provision of funding via a development fund and a metal financing scheme. The metal financing scheme offers various methods of financing to jewellery manufacturing businesses, and provides some security and flexibility regarding payment terms and the management of price fluctuations.
- Profiling beneficiation by showcasing new products and technology.
We are working alongside the departments of Mineral Resources; Science and Technology; and Trade and Investment, to leverage funding and support for these initiatives.
REPORT ON INTERVENTIONS AND ACTIVITIES
Beneficiation launch
Amplats’s beneficiation strategy was launched in July 2009. During the launch the Company highlighted the key aspects of the strategy with government. This event also provided us with an opportunity to launch the PGM Development Fund and the Lephalele fuel cell.
PGM Development Fund, fuel-cell research and the demonstration fuel cell
The Company has allocated R100 million over three years to a Platinum Group Metal (PGM) Development Fund, with the specific objective of providing capital for future PGM market development and beneficiation.
The fund will focus on partnering innovators in PGM technologies by investing in ventures at various stages of development. It will seek to invest primarily in early-stage or start-up activities that demonstrate commercial viability when scaled to a fully fledged business.
The PGM Development Fund has been structured as a private equity fund and will be managed as such by Douglas Investments. In line with private equity investment principles, Amplats will look to generate market-related risk-adjusted returns in the fund but will also seek value beyond financial returns, in the form of the long-term local development of PGM technologies.
The fund has been evaluating two such opportunities and will hopefully close the first deal in the first quarter of 2010.
Research on fuel cells commissioned by the Department of Science and Technology and the Company focused on the energy sector, with specific focus on determining the opportunities for fuel cells in the country and the rest of Africa. It has provided valuable input and will act as a platform for much discussion and debate with government and other stakeholders in addressing the hydrogen economy and related technologies for alternative energy solutions.
The Lephalele fuel cell, which produces 200 kw of energy, was commissioned in April 2009 and operates successfully. The fuel cell is a product of the United Technologies Company in the USA, which continues to provide on-line monitoring and support. Its commissioning has provided valuable learning experiences for all parties and is expected to continue to do so.
PGM technical workshop
In line with its market development and beneficiation strategy, the Company continues to allocate funding for research and development locally and globally. In 2009, in partnership with the Department of Science and Technology, Amplats hosted an inaugural PGM technical workshop. Research scientists from across the country, representing most of the dedicated research institutions, were invited to discuss the current status of PGM research in South Africa and the systems that need to be put in place in order to promote and develop more research into PGM applications development. The participants also engaged in an opportunities brainstorming session, which yielded positive results.
The workshop was attended by over 35 specialist researchers and provided an outstanding networking opportunity. The researchers were invited to submit R&D proposals, and 29 of these were received. Final decisions on the allocation of funding for proposals that meet the criteria will be taken in the first quarter of 2010.
Jewellery development
The PLATAFRICA design competition and awards function proved to be a success even in the tough trading conditions experienced by the local jewellery industry in 2009. The theme for the year was the celebration of the evolution of southern African courtships and marriage rituals. A collaboration design submission involving a professional and a group of students was introduced for the first time and proved successful. The competition also provided us with an opportunity to highlight our ongoing support for the local jewellery industry.
Our aim in assisting the development of the jewellery design and manufacturing industry in South Africa is to make it more competitive. To this end, we engage in the following interventions:;
- Market stimulation and consumer awareness. In driving demand, we support a local platinum jewellery consumer awareness programme via generic and cooperative advertising, a media campaign and retail-staff training. These activities are aimed at educating consumers about platinum jewellery; and assisting the industry to be sufficiently geared to meet increasing demand.
- Metal financing. In addressing the barriers to jewellery industry growth in South Africa, the Company implemented its platinum metal financing scheme in 2006. The scheme is a consignment sale scheme with various options for managing price fluctuations, and participants have extended periods for payment following delivery.
The table in manufactured capital reflects local PGM sales into the jewellery industry. The decline in platinum volumes was caused by the tough trading conditions experienced. Palladium volumes have returned to their 2006 levels owing to the growth in the customer base.
- Commercial business. Prior to the PGM Development Fund, Amplats supported the development of two commercial jewellery businesses in partnership with relevant business partners and the government. A review of both businesses is under way, in line with our strategy to best delivery on our investments. This process will be concluded in 2010.
LOCAL BENEFICIATION
Market development that involves an increase in the uses and value of platinum group metals (PGMs) is a core pillar of our Company strategy.
Amplats remains committed to beneficiation in the context of its market development strategy, and continues to align its value-addition initiatives in order to maximise the sustainability of beneficiation programmes.
PRODUCT STEWARDSHIP
Platinum group metals (PGMs) are used in many applications to reduce environmental impacts. These include catalysts for refining processes, which improve energy efficiency; autocatalysts that reduce harmful emissions from vehicles; and fuel cells that produce energy with fewer CO2 emissions.
Although PGMs are used for various 'green' applications, this does not mean that the Company should ignore product stewardship principles when it comes to these metals.
In terms of REACH obligations, all the products we export to countries in the European Union have been pre-registered with the European Chemical Agency (ECHA). The following products have been pre-registered, with the relevant pre-registration certificates and numbers available:
- Nickel (metal)
- Copper
- Cobalt sulphate
- Gold
- Platinum
- Iridium
- Rhodium
- Ruthenium
- Nickel, matte
- Residues, copper-iron-lead-nickel matte, sulphuric acid insol. (SLR)
- Slimes and sludges, precious metal refining (PMC, PMCR and FIC)
- High-grade PGM concentrate
The last three products are names for 'grouping of materials/products' that were agreed at consortium level (the names in brackets are for specific Amplats products that fit the description for these materials).
REACH
In line with the requirement of the EU-based Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) regulations, Anglo American Platinum Limited appointed Anglo American Reach Limited as its 'Only Representative' in the EU. Amplats is active in different relevant consortiums and will join the various substance information exchange forums (SIEFs) as they are formed.
The Company is also actively involved in the sustainability and REACH committees of the International Platinum Association, which are assessing ways of reducing the environmental footprint of PGMs across their life cycle. A comprehensive life cycle assessment for platinum is likely to be commissioned by the International Platinum Group Metals Association and its members in 2010.
PRODUCT INFORMATION
The use of chemical and metallic products to enhance and improve life is a widespread practice worldwide. Alongside the benefits of these products, however, there is the potential for their adverse effects on people and/or the environment. Given the extensive global trade in chemicals and metals, EU legislation and similar international legislation, in the form of the Globally Harmonized System of Classification and Labelling of Chemicals (GHS), have been promulgated. The South African Government adopted the GHS and in response drafted national regulations (in the form of amendments to the Occupational Health and Safety Act, 1993), to which it has invited comment. Once these have been approved there will be a transition regulatory period of three years for pure substances and of four years for mixtures. A national GHS standard (SANS 10234:2007) has been approved.
There are currently no safety, health or environmental labelling requirements for pure PGMs metals. Labelling requirements do exist for base metal products and PGM-related products other than pure PGMs.
Amplats products have been given comprehensive material safety data sheets. Together with current product classification and product labels, these sheets are regularly reviewed and revised to align them with the requirements set out in legislation.
Functional ownership has been assigned to formalise the Company's product stewardship systems. Included under this is the formalisation of Amplats's classification, labelling and packaging guidelines and procedures.
Two fines were incurred in 2009 as a result of non-compliance with regulations pertaining to the labelling of base metal substances exported to the EU.
Amplats did not conduct a customer survey in 2009, but one is scheduled for 2010. There were three customer complaints relating to our products in 2009, two from Toyota and one from Heraeus NY. These complaints were addressed and corrective action was taken to avoid a repeat.
| 2009 | 2008 | 2007 | 2006 | |
| Platinum (ounces) | 1,988 | 2,842 | 1,120 | 1,148 |
| Palladium (ounces) | 3,016 | 1,610 | 1,355 | 3,548 |
| Consignment customers (Total) | 20 | 13 | 8 | 4 |
Palladium used in cleaner coal technology
The palladium-coated sorbent beads interdispersed with
mercury — one of the harmful trace contaminants the new
technology is designed to remove.
Owing to the abundant coal reserves that are to be found in various parts of the world, many countries’ and scientists’ interest in ‘clean’ (most sources would say ‘cleaner’) coal technology has continued to grow. Johnson Matthey, one of Amplats’s customers, has been working with the US Department of Energy’s National Energy Technology Laboratory to develop new technologies for removing harmful substances from syngas, a mixture of hydrogen, carbon monoxide and carbon dioxide produced during the process of coal gasification.
In 2008 the company’s novel, palladium-based technology won a prestigious R&D 100 Award, which made it one of the world’s 100 most technologically significant products that year.
An example of sorbent technology, Johnson Matthey’s new palladium-coated sorbent beads make it possible for coal energy to be used in a more environmentally friendly and thermally efficient way. The solid-sorbent-based scrubbing process involved is capable of removing mercury and other harmful trace contaminants, such as arsenic, selenium and cadmium, at high temperature and at various stages in the coal gasification process.
Compared with more conventional low-temperature capture by activated carbon, the high-temperature capture of these trace elements allows the high thermal efficiency of the combustion-turbine power-generation process in integrated gasification combined cycle power plants to be retained.
