Waterval Smelter

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The ACP Plant at Waterval Smelter will contribute to the reduction of SO2 emissions from the smelter. Waterval
Smelter processes concentrate from the mines, as well as the furnace matte produced by the Mortimer and
Polokwane smelters. 2003 saw the simultaneous
commissioning of the ACP Plant and Slag-cleaning Furnace and the continued operation of existing plants. In the
context of this highly challenging situation, Waterval Smelter performed well. Commissioning activity resulted in a temporary build-up of metal in the pipeline in the
middle of the year. A focus on establishing optimum
operating practices for the new equipment yielded quick results, and by year-end all excess stocks had been
cleared.

The ACP Plant ramp-up proceeded smoothly and it will achieve full throughput in the second half of 2004. A partial re-build was carried out on the Pierce-Smith converters and the old acid plant was refurbished. These plants will be retained on standby until completion of the second ACP converter in 2006.

Costs

The ACP Plant moved from a commissioning to an operating phase at the beginning of 2003 and the entire cost of running the new facility was borne on working costs, while the old Pierce-Smith converters and acid plant were run in tandem with the ACP Plant for the full year. The contract to use an Xstrata furnace to process furnace slag was terminated at the beginning of the year, and this cost was replaced with that of running the new Slag-cleaning Furnace. The net effect was that total cash operating costs rose by R130,6 million, or 23,8%. Platinum ounces produced by the smelter increased by 9,1%, resulting in a cash unit cost increase of 13,5%.

Capital expenditure

Capital expenditure totalled R300 million in the year, of which R78 million was for ongoing items and R222 million for expansion, including costs associated with the ACP Plant and Slag-cleaning Furnace.

Outlook

2004 promises to be another challenging year. The optimization of the newly commissioned plants will be the main focus area, enabling the Waterval Smelter to achieve its sulphur dioxide emission reduction targets and to process the increased volume of mined and purchased ounces.

Reference for information:
www.angloplatinum.com/investors/reports/ar_03/b_rprt/op...