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During 2008, Anglo Platinum made good progress in building the teams and systems it needs to address operational challenges and the challenges presented by the current global economic crisis. In taking action, we have addressed short-term issues while remaining mindful of the long-term strategy. Highlights during this turbulent year included a marked improvement in employee safety, record profits, the appointment of our new CEO and the implementation of a unique employee share-ownership scheme. |
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 Anglo Platinum’s record financial performance in 2008, for the third consecutive year, was chiefly the
result of exceptionally high platinum group metal prices in the first half of the year. The global
economic crisis followed a period of high demand and had a major impact on the platinum business.
At the beginning of the year, the price of platinum rose to over US$2,300 per ounce; within six
months, it had dropped to below US$800 per ounce.
Anglo Platinum has responded to the reduction in short-term demand and will maintain production
production in 2009 at the same level as that in 2008. We have also adapted to the low price
environment and have slowed down our capital projects to limit our capital expenditure; and
focused on managing our costs and improving our productivity so as to reduce operating costs.
Management is implementing a wide range of retrenchment avoidance measures that, we believe,
will enable us to avoid retrenchment of our full-time employees. However, should economic
conditions deteriorate further such action may be unavoidable.
I am pleased to note the ongoing cooperation between Anglo Platinum and the Department of
Minerals and Energy and the progress made in 2008 towards completing the mineral rights
conversion process.
An important milestone was the implementation of an innovative broad-based share participation
scheme for employees. The cooperation between employer, employees and unions in reaching
agreement on the terms of the scheme was evidence of the Company’s efforts to enhance
stakeholder relationships at every level. |
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SAFETY PERFORMANCE |
Regrettably 17 employees died at Anglo Platinum operations during 2008. I extend the Board’s
condolences to the families, friends and colleagues of the deceased. The number of deaths in 2008
is significantly lower than that in 2007, when 25 employees lost their lives, but remains far from our
goal of zero fatalities.
The Board fully supports the safety initiatives in place to achieve ‘zero harm’ in every Anglo Platinum
workplace. The launch of our new values and culture project will address the link between attitude
and safe or unsafe acts, and will increase mutual care and respect in the workplace. We are
encouraged by the material reduction in 2008, in the rate at which injuries occurred. I believe that
the executive team is well placed to enhance further the excellent initiatives already under way.
Anglo Platinum actively participates in safety programmes within the Anglo American group and
benefits from the extensive sharing of knowledge associated with this. |
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OUR LEADERSHIP |
In 2008, Anglo Platinum welcomed Neville Nicolau as the new CEO. I wish to take this opportunity to
thank Norman Mbazima and Duncan Wanblad for their fine stewardship of the company while we
searched for a new CEO. We are confident that Neville’s experience in mining operations, and his
focus on safety, will position the company for solid performance in the future.
There were several changes in the membership of Anglo Platinum’s Board in 2008. Norman Mbazima
and Duncan Wanblad resigned following the successful completion of their terms as acting co-chief
executives. Philip Baum resigned in September 2008, and Anthony Redman retired at the end of the
year. We also welcomed new members to the Board. Kuseni Dlamini, Head of Anglo American South
Africa, joined the board as a non-executive director in September 2008. Mohammed Valli Moosa and
Sonja Sebotsa were appointed independent, non-executive directors in January. Bongani Nqwababa,
the new Executive Director: Finance of Anglo Platinum, joined the board on 1 January 2009. |
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The global economy and the markets |
The global economic downturn in 2008 has had a profoundly negative impact on our business.
Amid the current global uncertainty, it is worth reflecting on the unique attributes of the platinum
business and how these have influenced the steps taken by the Board and by management towards
the end of 2008.
Global platinum production is derived primarily from underground hard-rock mining, with lead times
of several years from investment to platinum production. Beyond short-term concerns, it remains
necessary to manage the business with regard to long-term demand expectations. Platinum remains
a strategic industrial and premier jewellery metal and the long-term fundamentals of the platinum
industry remain sound.
However, the short-term decline in demand required action. Maintaining flat production in 2009, at
the 2008 level of 2.4 million ounces, is expected to result in supply that is more in line with near-term
demand levels. Together with medium- to long-term productivity improvements, short-term cost
reduction and capital management are essential in keeping the business sound, particularly in the
current environment. |
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STAKEHOLDER ENGAGEMENT AND CORPORATE
CITIZENSHIP |
| The Board believes that stakeholder engagement, and particularly community engagement, is
critical to business success. The risk of strained community relations is to be expected during the
process of community resettlement, and the Motlhotlo resettlement has been no exception. Overall,
the planned resettlement has progressed well, with 883 of 956 families (over 90%) successfully
resettled. However, a small number of community members, with the support of an NGO, made a
number of unfounded accusations against Anglo Platinum, which led to an investigation by the
South African Human Rights Commission. Although the commission found that there had been no
violations of human rights on the part of the Company, Anglo Platinum nevertheless used the
process to re-examine and enhance aspects of its policies and practices for community engagement. |
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IN CLOSING |
Global economic uncertainty and its associated impacts on the platinum business are likely to
prevail in the near term. Management and the Board will face tough decisions as they strive to
ensure that the business adapts to the current environment but, at the same time, remains able to
maximise the value of Anglo Platinum’s excellent assets.
Safety remains a critical challenge. We will intensify our efforts to put measures in place to achieve
zero harm. In this regard, we have improved our safety, health and environmental policy after an
extensive review, and will re-launch it early in 2009.
With a new CEO at the helm, a solid leadership team in place, and high quality staff throughout the
organisation focused on safety and productivity, I am confident that Anglo Platinum will be able to
weather this current crisis and retain its position as the world’s leading platinum producer |
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| Fred Phaswana |
| Chairman |
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| Johannesburg |
| 5 February 2009 |
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