ANNUAL REPORT 2001 - Anglo Platinum

Chairman’s Statement (continued)1 2001 00080060040020002 5002 0001 5001 000500Average monthlymarket prices(Palladium US$/oz)9798990001Average monthlymarket prices(Rhodium US$/oz)PROJECTSDevelopment at Bafokeng-Rasimone mine wasfurther delayed in 2001 by adverse geologicalconditions. A revised programme is now inplace to reverse these setbacks, includingaccelerated development, extended opencastmining and a new Merensky decline. The plantis performing exceptionally well.All other projects announced prior to the periodunder review are progressing satisfactorily,including the Rustenburg/Waterval UG2expansion and the Maandagshoek mine,for which a joint venture agreement withan African Rainbow Minerals-led consortiumwas signed in 2001. The ACP project wastouched upon earlier in this report. Additionalprojects were announced during 2001,including the Polokwane (Pietersburg)smelter, the Pandora joint venture with Lonmin(yet to be approved), the Styldrift joint venturewith the Royal Bafokeng Nation and the newTwickenham mine.BLACK ECONOMIC EMPOWERMENTRasimone/Styldrift project with the RoyalBafokeng Nation, both of which remain subjectto the fulfilment of certain suspensive conditions.Mvelaphanda Platinum (Proprietary) Limited,whose acquisition of 22,5% of Northam Platinumwas facilitated by Anglo Platinum, continues tobenefit from its investment in that company.Negotiations with Northam in respect of aninterest in the Pandora joint venture are ongoing.PGM MARKETSPlatinum, which in 1990 accounted for some80% of Anglo Platinum’s revenue, contributed50% in 2001, while palladium’s contributionrose from 4% to 28%. Rhodium also made asignificant revenue contribution, at 14% in2001, and may consolidate its position as UG2becomes more dominant over the next fewyears. The palladium content of ores from theEastern Limb (where many of Anglo Platinum’snew mines will be sited) is higher than on theWestern Limb, suggesting that the Group’sincreased exposure to palladium will persist.The recycling of PGMs is an importantadditional component of the market and hasan influence on PGM pricing.In 2001, South Africa’s share of primaryPGM supply (ignoring Russian metal soldfrom stock and recycling) was 55%, withRussia at 33% and North America at 10%.Anglo Platinum had a 28% market share.For platinum supply alone, South Africaenjoyed a 73% market share in 2001, justover half of which was supplied from AngloPlatinum’s operations.PRICE ELASTICITYDemand for PGMs has becomemore elastic in recent years,demonstrated for example inJapanese and Chinese platinumjewellery demand. The industry’sjewellery promotion campaign hasfocused on increasing geographicaldiversity in an attempt to counter thissensitivity.09798990001Anglo Platinum remains committed to supportingand encouraging the economic empowerment ofthe previously disadvantaged, as evidenced by thestructure of the Maandagshoek joint venture withAfrican Rainbow Minerals and the Bafokeng-PGM MARKET SHARETotal world primary platinum, palladium andrhodium supplies in 2001 were 11,8 millionounces (not including an estimated 1,9 millionounces supplied from Russian stocks).The commonly held belief that autocatalystconsumption of PGMs is inelastic is valid onlyin the short term. There has been a swing fromplatinum to palladium in autocatalysts in recentyears. The reverse may happen as auto manu-8