Circular to Amplats Shareholders - Anglo American Platinum

Corporation who holds the majority share in the Bokoni Platinum Mine, Ga-Phasha, Boikgantshoand Kwanda joint-venture projects. Amplats also has pooling- and sharing-arrangements withAquarius Platinum (South Africa) Proprietary Limited to mine the shallow reserves of the Kroondaland Marikana mines that are contiguous with Amplats’ Rustenburg mines.The Group’s smelting and refining operations are wholly owned through RPM and are situatedin South Africa. These operations treat concentrates not only from the Group’s wholly -ownedoperations, but also from its joint ventures and third parties.Elsewhere in the world, the Group is ramping up the Unki Platinum Mine in Zimbabwe and is activelyexploring in Brazil. It has exploration partners in Canada, Russia and China.1.2 ProspectsMarket indications during the first nine months of 2011 support Amplats’ expectation that the platinummarket in 2011 will be in balance as a result of strong demand in the autocatalyst, other industrialand ETF segments during the first half of the year and the sustained strengthening of the jewellerysegment, particularly in China, during the second half of 2011. The recovery in demand is expectedto be met by the sluggish increase in supply.Although autocatalytic and other industrial demand for platinum remains threatened by concernsof a double dip recession in Europe and North America, it is believed that the strengthening jewelleryand ETF demand are likely to support the platinum price.Amplats remains on track to achieve its refined production and sales volume target of 2.6 millionplatinum ounces while achieving its productivity target of 6.6m² per employee.Cash operating costs increased by 10% to R13,093 per equivalent refined platinum ounce during thefirst nine months of 2011, mainly due to higher stores and consumables, labour and electricity costs.Expected higher production volumes from underground sources, remedial actions implementedto improve safety performance and improving labour productivity is expected to reduce unit costsin the fourth quarter of the year to around R12,250 per equivalent refined platinum ounce. Althoughthis is largely in line with the target for the second half of 2011 of R12,000, the average cash operatingcost of R13,093 per equivalent refined platinum ounce seen in the first nine months of 2011 impliesa higher than expected unit cost for the current financial year. Unit cost target for 2011 has thereforebeen revised to approximately R12,900 per equivalent refined platinum ounce .1.3 Share price historyThe price history of the Amplats Ordinary Shares on the JSE is summarised in Annexure 7.23