Anglo American Platinum (Amplats) has shut the processing facilities at its Waterval smelter complex in Rustenburg.
The decision to close the Waterval processing facilities follows an explosion in the Anglo Converter Plant (ACP) phase A on February 10 which resulted in its temporary closure whilst repairs took place – estimated for completion by the second quarter of 2021.
Amplats has consequently declared a force majeure to its customers as well as its third party concentrate suppliers in a development that will add more upward pressure on the prices of palladium and rhodium in particular, as well as platinum.
It now expects to churn out between 3.3 and 3.8 million ounces of platinum group metals, 900,000 ounces short of its previous guidance of between 4.2 and 4.7 million ounces.
The world's second-largest producer of platinum said phase B of the plant was set to take over from phase A. But water was detected in phase B's furnace which posed a high risk of explosion.
"Notwithstanding extensive testing being conducted to determine the source of the water, and a number of circuits being isolated, water continued to be observed in the furnace," it said.
As a result, the company had "no other option but to temporarily shut down the phase B unit, to ensure the safety of all employees, and avoid a catastrophic event."
It is anticipates that the repair work to fix the phase B unit will take approximately 80 days.
Amplats said that, as a result, the entire Anglo Converter Plant has been temporarily closed and it has declared force majeure.