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Anglo American Platinum makes significant investments in SA’s hydrogen economy

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nomonde_ndwalaza_xx.pngAnglo American Platinum continues to make significant investments in South Africa’s hydrogen economy, according to a company spokesperson.

The Platinum Group Metals (PGMs) miner’s external communication principal Nomonde Ndwalaza told Rough & Polished’s Mathew Nyaungwa in an exclusive interview that they are taking a multi-pronged approach to this.

She said they made investments and partnerships to establish a hydrogen valley in South Africa, invest in renewable energy, and technological developments such as the hydrogen-fueled mine haul truck.

Meanwhile, Ndwalaza said Anglo American Platinum experienced a robust PGM basket price of $2,671 per PGM ounce in the first half of 2022, the second highest on record as a result of strong underlying fundamentals for PGMs.

She said they continue to face pressure on PGM prices but the quality of the assets they have means the company have a diversified basket of metals and a strong basket price.

Below are excerpts from the interview.

What is your projected output for the year?

Our refined production guidance for 2022 is between 3.7 – 3.9 million PGM ounces. Our sales guidance is 3.7 – 3.9 million PGM ounces. Our metal-in-concentrate guidance is between 3.9 – 4.3 million PGM ounces and our unit cost guidance is between R14,000 – R15,000 per PGM ounce, based on an oil price of around $100 per barrel. All guidance is subject to no disruptions due to load-shedding.

Which factors have been affecting your production?

The first half of 2022 has seen us largely mitigate the operational headwinds of Covid-19, global supply chain disruptions, security of electricity supply, as well as social and geopolitical complexities to deliver another strong financial performance, bearing in mind the record results of the first half of 2021 when we processed and sold much of the inventory that we had built up during the Anglo Converter Plant (ACP) rebuild in 2020. Our performance in the first half of this year represents more normalised levels of sales volumes and resulting EBITDA.

The supply chain does continue to impact us, and the delivery of substandard materials has extended the Polokwane smelter rebuild by two months leading us to revise our guidance. Whilst this is disappointing, this is a temporary delay in refined production and a timing issue rather than lost production.

Some companies have of late been recording lower average metal prices. What has been your experience in the first half of the year?

We experienced a robust PGM basket price –$2,671 per PGM ounce, the second highest on record as a result of strong underlying fundamentals for PGMs. We continue to face pressure on PGM prices but the quality of the assets we have means we have a diversified basket of metals and a strong basket price.

What is your projection of prices for PGMs for the rest of the year?

In the PGM markets, the forecast is for platinum’s surplus to gradually move towards a deficit due to a significant increase in automotive platinum demand, as some platinum replaces palladium in gasoline catalysts. Palladium is likely to move into surplus for the opposite reason, though to what extent will depend on what happens to automotive production. Rhodium should head back into deficit after two years of surplus. Longer-term, we are excited with the momentum we are seeing in the development of the hydrogen economy – with more countries announcing hydrogen-specific strategies, there is more investment committed to broader hydrogen infrastructure and more green hydrogen production, which will enable us to unlock incremental PGM demand in new segments such as hydrogen production and storage, as well as mobility.

How are you adding value to the metals that you are producing in South Africa?

We believe that mining must play its part to address the environmental challenges of a carbon-constrained world while continuing to meet the ever-growing demand for its products. SA is the world’s largest producer of PGMs and home to the bulk of known PGM resources. The metals we mine presents a significant opportunity for economic development, including the creation of new jobs and the development of the PGMs sector, while also contributing to South Africa’s decarbonisation objectives.

We are committed to changing the competitive advantages we have into real economic activity.

We are doing significant work in this space through our investments and partnerships to establish a hydrogen valley in South Africa, invest in renewable energy, and in technological developments such as the hydrogen-fueled mine haul truck we are currently trailing at Mogalakwena.

We continue to make significant investments in the hydrogen economy and are taking a multi-pronged approach to this. This approach is not unique to hydrogen and is used for all market development activities. Market Development today focuses on three major themes – 1. PGMS within the green energy transition, 2. PGMS for everyday life and 3. PGMs for wealth/meaningful luxury and investment:

- Investing in research and development to develop new projects with the potential to be transformed into commercially viable technologies and businesses.

- Deploying growth capital, through our investments as well as via the PGMs-focused venture capital fund AP Ventures.

- Attracting additional investment partners 

- Enabling commercial collaboration, by leveraging our networks and expertise to accelerate the adoption of relevant technologies and products

Green hydrogen produced by platinum-based proton exchange membrane electrolysers is expected to reduce global carbon dioxide emissions. How are you involved in the green hydrogen economy?

Hydrogen has a significant and wide-ranging systemic role to play in achieving a low carbon future, including its use in transportation, heat, power, industrial processes, and as an energy carrier and storer that will enable the development of renewables-based power generation systems.

To produce green hydrogen, you need to use renewable energy. Our focus is therefore not only on the hydrogen part of the equation but also on investing in the renewable energy sources that will enable us to produce green hydrogen

In March, Anglo American announced a partnership with EDF Renewables to work together to develop a regional renewable energy ecosystem in South Africa to deliver 24/7 renewable power to our operations by 2030. The initiative draws on the huge natural renewable potential of South Africa and would require the construction of a network of on-site and off-site solar and wind farms, and pumped storage. 

We remain a cornerstone investor in AP Ventures – a PGM-focused fund, whose current portfolio focuses predominantly on the green hydrogen economy.

Beyond this, our focus is not solely on hydrogen – we also invest in other technological developments, e.g. through Lion Battery Technologies, which is working on applications that will require the use of PGMs in batteries.

What are you doing to conserve the environment?

One of our strategic priorities at Anglo American Platinum is to be a leader in ESG. To achieve this, our strategy is to fully implement the three pillars of our sustainable mining plan by:

- Developing trust as a corporate leader and providing ethical value chains and improved accountabilities to the communities we work with;

- Enabling thriving communities by improving their health, quality of education, and access to employment and other opportunities; and

- Maintaining a healthy environment by creating waterless, carbon-neutral mines and delivering positive biodiversity outcomes.

Our nuGen™ project, for example, is focused on the end-to-end integrated green hydrogen production, fueling, and haulage system developed by Anglo American in cooperation with various external partners. This year, nuGen™ launched its pilot initiative – which is the world’s largest hydrogen-powered ultra-class mine haul truck to operate fully laden (510t = 290t payload + 220t when empty) in real mine conditions – at the Mogalakwena mine in Limpopo. Once proven, Anglo American plans to roll out the technology across our global fleet of c.400 trucks incrementally.

With our haul trucks representing up to 80% of diesel emissions at our sites, this technology will make a major contribution toward our operational carbon neutrality commitment. Beyond the GHG emissions reduction benefit, the hydrogen complexes for haul trucks at our sites have the potential to serve as local and regional hubs for an emerging hydrogen economy, in South Africa and beyond.

Beyond this, recognise the value and scarcity of our country’s natural resources, especially energy and water. Our commitment to the natural environment goes beyond this to include compliance with environmental legislation, our approach to climate change, energy usage, and water and air, including responsible land management and closure.

Through the Hydrogen Valley initiative, we are focused on decarbonization initiatives that go beyond our mine gate where we are focused on creating green energy solutions within transportation like the first hydrogen freight corridor in the country, and the use of hydrogen and fuel cells within industrial applications as well as within buildings.

How concerned are you about the safety of your workers and what has been your safety record so far this year?

The safety, health and well-being of our employees are our foremost values. Our robust health and safety strategies underpin our leading response to managing the infectious coronavirus disease (Covid-19) across our operations and our unwavering focus on eliminating fatalities by reducing (and ultimately eliminating) injuries from the workplace, as well as mitigating any adverse effects on human health. We aim to continually build and instil both a company and industry culture that protects people from harm and improves their health and wellbeing.excl_20092022_eng.png

Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished