ANNUAL REPORT 2001 - Anglo Platinum

Platinum Market Review (continued)OTHER METALSPortable fuel cellapplications for poweringlaptop computers andmobile phones will makea significant contributionto the growth in demandin the second half of thisdecade.OTHER METALSPlatinum is the largest single contributor toAnglo Platinum’s revenues. However, theGroup also produces significant amounts ofthe other PGMs (palladium, rhodium, iridiumand ruthenium), gold and base metals (nickel,copper and cobalt). The contribution of theseother metals to total revenue in 2001 was 50%.PALLADIUMPalladium demand fell an estimated 24% in2001, as higher prices at the beginning of theyear drove consumers to seek alternatives.Total supply of palladium declined in 2001to around 7,55 million ounces, despite anincrease in South African production asexpansions and new projects came on stream.A significant proportion of the estimated4,5 million ounces of Russian palladiumexported in the first three quarters of the yearis believed to have failed to find buyers and isprobably still held as stock in Switzerland.Russian shipments slowed from August, whenAutocatalystA concerted effort by auto manufacturers toreduce their reliance on palladium, and a drawdownof inventory, resulted in a 14% fall in grossdemand for palladium in this application in 2001.Palladium’s role in emission control systemscannot be eliminated, especially in the reductionof HC levels, but, where possible, manufacturersare reducing palladium consumption bysupplementing with platinum and/or rhodium.ElectronicsPalladium demand from the electronics sectorin 2001 is estimated to have halved comparedto the previous year. A decline in consumerdemand for electronic goods and high inventorylevels of electronic components at the end of2000 contributed to this fall. As in the autocatalystsector, high palladium prices haveencouraged the development of technologiesthat could reduce reliance on the metal; agrowing proportion of multi-layer ceramiccapacitors is being produced using base metaltechnology or pastes containing less palladiumsubstitutionis relatively easy.Erratic supplies and pricevolatility affected other areas ofelectronics demand for palladium in 2001,such as in lead frames and hybrid integrated circuits.DentalThe use of palladium in dental alloys declined byan estimated 16% to 690 000 ounces in 2001.In certain regions, governments subsidise particularalloys, but markets that lack these constraints canreadily switch to more price-competitive alloys atany time. Some markets switched to gold alloys.North American demand fell in 2001 in directresponse to higher prices. However, if the palladiumprice maintains its recently lower level, somereversal of this substitution may be possible.In Europe, demand fell 40% in 2001 and, in Japan,the 8,5% decline in demand was due to economicfactors affecting the number of dental treatments.JewelleryPalladium demand in jewellery fabrication wasthe price weakened in response to excessivethan previously. Despite the recent fall in thenegatively affected by the decline in platinum jewelleryliquidity and Russia curtailed spot sales ofpalladium price, its premium to gold hasmanufacture, especially in Japan. An increase inthe metal.resulted in a lower use in connectors, wheredemand for white gold boosted palladium – used as32