Good day, ladies and gentlemen, and welcome to the Anglo American Platinum Investors and Media Call. All participants will be in listen-only mode. There will be an opportunity to ask questions later during the conference. If you should need assistance during the call, please signal an operator by pressing star then zero. Please note that this call is being recorded. I would now like to turn the conference over to Chris Griffith. Please go ahead, sir.
Thanks, Claudia. Thank you for joining me and the Finance Director, Craig Miller, and also our Executive Head of Processing, Gary Humphries, at short notice for the call. Unfortunately, we've had a material event at our Anglo Converter Plant, or as we know, ACP, which will impact our refined production and sales for this year. As you would have seen in the recently announced SENS and media release, that we've announced the temporary shutdown of the ACP, which is an integral part of our processing chain. As we're unable to complete processing our material, this has led us to declare force majeure. There were a series of incidents, and extensive attempts at miigation, which were unsuccessful and ultimately led to the need to temporarily close the entire ACP.
The Phase A converter plant at Waterval Smelter in Rustenburg was damaged following a coal dust explosion in the converter on the 10th of February. Very fortunately, nobody was injured in the event, and Phase A was shut down to secure a safe working environment and to begin the critical repairs, which is estimated to be complete in Q2 of 2021. Our Phase B unit, so we always have one of the two units in standby, was then commissioned to take over from Phase A. In the process of ramping up Phase B to steady state, we detected water in the furnace. We proceeded to do extensive testing, and that was conducted to determine the source of the water, with the most likely source being in the water cooling circuits of the furnace.
After a number of potential leaking circuits were isolated, water in the furnace continued, however, to be observed. This has led to a very high risk of explosion, and the company has had no option but to temporarily shut down the Phase B unit to ensure the safety of all employees and to avoid a catastrophic event. Phase B has thus been shut down for repairs, and that's anticipated to take approximately 80 days. As a result of the temporary closure of the entire ACP, Anglo American Platinum has had to declare force majeure to customers, suppliers of third-party purchase of concentrate, and suppliers of trailing material, as we're unable to complete the processing of material during the converter repairs.
While production from our own mines will continue, and the concentrate from those mines will continue to be smelted at one of the four smelter complexes, production from our own mines, as well as third-party material, will not be able to be converted to final production while the ACP is undergoing repairs. Our initial estimates indicate that this will have a significant impact on our refined production guidance. As a result, we've decided to provide an indication of H1 2020, so the first half refined production guidance, as well as revising our full-year revised production outlook. Our new H1 2020, while we've never given H1 guidance before, our guidance that we provide today for the first half is in total PGMs between 850,000 oz and 1.050 million ounces, platinum 400,000 oz- 450,000 oz, palladium 300,000 oz - 350,000 oz, and rhodium 65,000 oz- 75,000 oz.
By the end of the year, we will expect to have made up some of that shortfall in refined production and to reduce the work in progress inventory. It will take us probably about two years to fully process this WIP, and that should be completed during the course of 2022. Our revised full-year 2020 refined production guidance is total PGMs 3.3 million ounces-3.8 million ounces. We previously guided 4.2 million ounces-4.7 million ounces, so you can see about 900,000 oz will be impacted this year. Platinum, 1.5 million ounces-1.7 million ounces. That was previously 2 million ounces-2.2 million ounces. Palladium, 1.1 million ounces-1.2 million ounces, and that was previously 1.4 million ounces-1.5 million ounces. Rhodium, 250,000 oz-350,000 oz, and we previously, that was part of our other metals, so previously unguided.
Our key priorities are clearly to get ACP operational as soon as possible without compromising on our safety standards, to seek to work with customers to limit the impact of these deferred shipments where possible. To this end, we'll be engaging directly with customers and other key stakeholders. Now I will open up the line for questions for myself, Craig, and Gary. Thank you very much, operator.
If you would like to ask a question, please press star, then one on your touch-tone phone or on the keypad on your screen. If you decide to withdraw the question, please press star, then two. Again, ladies and gentlemen, if you would like to ask a question, please press star, then one. We will pause to see if there are any questions. We have a question from Jason Fairclough from Bank of America. Please go ahead.
Hi. Yep. Good afternoon, Chris. Thanks for this update. Just two quick ones from me. Are you able to give any indication of the cost impact? Should we just be thinking about higher costs, or do those costs actually just get buried in inventory? Also, I'm just wondering if you could give us a little bit of color around the working capital, if you've done any dangerous math on what sort of build of working capital we should think about in dollar terms.
Thanks, Jason.
Hi, Jason. Jason, I don't have an estimate for you in terms of the cost impact at the moment. What we will do if we're so required to do so, we will provide an update around our unit cost guidance for the year. That's if there is a requirement for us to update from what we previously guided when we issued our results a few weeks ago. In terms of the working capital build, we don't have that just at the moment. Clearly, it will be quite material for 2020, and then clearly it will start to unwind into 2021 and 2022.
If I could just follow up. You've declared force majeure. Does that mean that there are no penalties to be paid here except inasmuch as you'll have to take the cost of the repair itself, but in terms of your customers, you don't have any liability, any penalty to be paid to them?
Jason, we're obviously working through that at the moment and engaging with our customers. We've obviously got different contractual commitments with them. Clearly, the decision to declare force majeure was to mitigate any impact that could arise out of that.
Okay. All right. Thanks for the color.
The next question is from Chris Nicholson from RMB Morgan Stanley.
Hello.
Please go ahead.
Hi, Chris. Hi, Craig. Guys, I noticed the wording in the press release specifically talks to third-party PoCs. Could I just confirm that you would continue processing as a matter of priority the material from the Biko and Kroondal, which are obviously your JV share? I would imagine, secondly, that would be through Mortimer, if I might. If you could just confirm that. Finally, just to firm up on my understanding of the ACP, can you still put the base metals through the BMR or the ACP just impacts the PMR? Thanks a lot.
Thanks, Chris. The answer to your first question is that we are unable to treat any material through the ACP. Just to explain how that works, all of the mats that comes from all the furnaces. The four furnace complexes all send their mats. It's the product from the furnaces go to the one point. This is the sharp end of the funnel, and it all goes through the ACP before it can go to the BMR and then the PMR. We are unable to treat any material. We're not able to give any preferential treatment to any customer, for example, or even to our own material. I think what we were clear to say, whilst we will continue mining and our own mining concentrate will go through the smelters, we can't put our own material through the smelters either.
It will affect all sources of supply, both own production, third parties, or tolls. Third parties include third parties and joint ventures. It'll affect all of us for that period that we have, let's say, the 2.5 months worth of shut. That concludes also then your second question, which says you can't bypass the ACP to be able to get to the base metals. It'll mean that all base metals and precious metals will be impacted for the duration of the repair of Phase B, which is currently estimated to be somewhere in the region of 80 days.
Okay. Thanks, Chris.
Thanks, Chris.
The next question is from Patrick Mann from BofA. Please go ahead.
Hi. Good afternoon, and thanks very much for the call. I think following on from Chris's question, just in terms of the priority of metal, my understanding was that there's kind of a fixed period for tolling and PoC where you assume it takes three months. Does your metal notionally go to the back of the line, or is it all done on a kind of pro rata basis here? Is everybody affected the same, I suppose is the question. What are your refined or your final inventory balances like?
Should we assume that refined production guidance is going to be similar to the amount of metal sold, or have you got anything in the cupboard that you can use to tide through this period? Maybe the last thing is there no way to do toll refining yourselves or to perhaps sell concentrates or metal in-process to somebody else who might have capacity? Thanks.
Okay. Patrick, clearly we'll work within the force majeure provisions with our customers to work through the metal. Our anticipation is that we would pro rata put everybody's metal through so everyone is treated fairly once we commence operations. I don't think anyone goes to the back of the queue. I think that's the key point. We don't have anything in the cupboard, so we've given the refined and the sales guidance. You can see they're very close to each other. There's nothing in the cupboard that we'll be able to sell more metal than we refine.
Lastly, on toll refining, that's clearly now something that now that we've declared force majeure, now that we've notified the market, now clearly we can have some conversations with third parties to see if there's any potential to mitigate some of the losses that we've just announced. We'll be going to our peers in the industry to see if there's any potential to do some toll refining.
Thanks. That's clear. Thank you, Chris.
Thanks, Patrick.
The next question is from Richard Hatch from Berenberg. Please go ahead.
Thanks, Chris, for the call. Appreciate it. First one is just, are you expecting any impact on 2021 guidance at this point, or perhaps you can just clarify that? Secondly, I suppose it wasn't disclosed, the event wasn't disclosed before this, just because you weren't quite sure of the exact impact and the need to declare force majeure, just to be clear?
On 2020 guidance. I think it's a bit early for us now because we're going to need to understand the quantity of metal that we'll get through the course of this year, and then what our ability to catch up is in the following year. That's still really early days for us now. I think, through the course, probably at H1, we'll be able to give more guidance as to what that may look like and the catch-up. I think the real bottom line is that we are unlikely in the fullness of time to lose the value because we'll continue mining and as far as we can, then that metal will still be available to be treated at some point. I think it just is a little early now, Richard, to be able to provide 2021 guidance.
We'll do that probably at the half year. The event was not disclosed. We have now disclosed the event when the event became an event. Up to now, because we've got the two converters, the event in the first one, yeah, well, that was a material event, but it meant that we could move over to Phase B. We have a second converter. Where we've had events between converters in the past, they haven't been notifiable to the market because we've had a spare converter and been able to manage that. The moment that we became unable to treat material through our second converter, clearly then, that was going to have an impact on our production and therefore an impact on the market, and that's why immediately we've notified the market.
The moment that it was only last night, we just got off a call with the board this morning that we've decided, and this is the course of action that we'll be able to do. That's why immediately we have notified the market.
Yeah. Thanks, Chris. I appreciate that. I'm glad no one was injured. Just to be clear, should we perhaps expect some kind of update on CapEx impact in maybe the half one?
Richard, if there is a need for us to adjust the CapEx guidance and the unit cost guidance, we'll do that when we've got further information. If there isn't, certainly we'll be coming back to the market at H1. If there's any changes, we'll certainly let everybody know. The current expectations, the range for CapEx, I think we're okay with that for the moment, but clearly we've got some work to do over the next few weeks. If those change materially, we'll come back to you and let you know.
Thanks.
The next question is from Nkateko Mathonsi from Investec Bank. Please go ahead.
Good afternoon, Chris. Nkateko here. Just to help me understand in terms of force majeure. My understanding was it needs to be an act of God. We just want to be clear that you can declare or you are able to declare a force majeure even though it's not an act of God. I also wanted to get a little bit of clarity in terms of the extent of damage on the A converter. How long do you expect the A converter to be offline? The third question is, what is the probability that the B converter takes longer than 80 days?
Okay, Nkateko. Thanks very much for the question. Yes, acts of God are force majeure events, but there are other events, including explosions, that are covered in the force majeure provisions. In this particular case, we believe that now, due to those circumstances, we are unable to fulfill our contractual obligations and therefore declaring force majeure. No, it is one of the provisions within the force majeure clauses in our contract. On the Phase A, it's currently our anticipation that it'll take until about the second quarter of 2021. I think that's still a little bit conservative at the moment, and Gary's team are certainly working at trying to bring that forward. At the moment, most of what takes up that time is the production of the high-pressure coolers.
It's actually the long lead items as opposed to the time that it takes to actually install those things. Those are the things that, as we stand now, I think our guidance is second quarter of 2021. Clearly in that process, we'll be trying to say, are there ways that we can bring back the unit to sort of basic readiness, if we could, to be able to, if we had a potential issue in the future, to able to switch over earlier. As it stands now, second quarter 2021, and then the 80 days, again, that's probably our best guesstimate now, being slightly conservative. I think Gary would not like me to say that he thinks we can do that a bit earlier. I think it's really early days now. The team are planning to the minutest detail now the repair.
We've got to rebuild the hearth, and we've got to move across the coolers from Phase A into Phase B. In the meantime, in the background, we'll be manufacturing also in long lead items, the spare coolers for Phase B. That process is underway. It's our best guess at the moment, but that's not our overly aggressive guess as to what this could look like. 80 days, we think is a realistic guideline of what it will take us to repair Phase B.
Nkateko, do you have any further questions?
No, nothing.
Okay, thank you. The next question is from Jana Marais, from Anglo American. Please go ahead.
Yes. Sorry, it's from Felix Njini at Bloomberg. Sorry, he used my login details to dial in.
Okay.
Felix, can you continue?
Yeah. Hi, please. Are you able to name some of the local companies that you were refining the metal for, just to confirm?
Yes, they're all our normal partners, Felix. Sibanye, Siyanda, ARM, and who else?
RBPlat.
RBPlat, those are the parties that we treat material for.
Okay. Thank you.
The next question-
Thanks, Felix.
is from Myles Allsop from UBS. Please go ahead.
Thanks. Yeah, just a quick question about when you restart the ACP, will you have any flexibility as to which products you produce? Clearly, there's a much bigger deficit on the palladium side and rhodium side than on the platinum side. Can you kind of try and produce more of the PGMs that are wanted? The second question is just more looking at the second converter. When was that last used? Have you been underspending on CapEx in sort of over the last three years now? Thank you.
The answer to your questions, Myles, thanks for that, is no, you can't differentiate the metals. The metals come out in the basket. They'll go through the ACP. We'll then take out the base metals first, and then you've got the rest of the precious metals. Through the process, they sort of go through a long sausage machine, and depending on the part of the process you're in, it'll either drop out platinum, palladium, rhodium, and the other precious metals. They each have a sequence that they get dropped out in. You can't prioritize, for example, to selectively drop out more rhodium or selectively drop out platinum first. They've all got different times that it takes to drop out of the process, and that's all as part of one long sausage machine.
Secondly, your question on CapEx is, no, we don't think we've been underspending on CapEx. As a matter of fact, over the last five years or so, our spend on CapEx in the processing division, but in particular around smelting, has risen materially as we've put our smelters onto very rigorous and brought forward some of the timing of our smelter rebuilds. We would argue that, no, we haven't been underspending our capital as opposed to rather, we've been spending a bit more on CapEx on processing and smelting than we have in the past. About a year ago, we switched over to Phase A, and Phase B was running at that particular time. There was absolutely no issue, and we had introduced some new designs into Phase A.
We wanted to make sure that we had Phase B on standby just to make sure if there were any issues with the new designs, that we'd be able to switch back across to Phase B at any time, which is what we were doing now. Now, again, we have just spent a very significant amount of money on Phase A and have upgraded it in a range of different ways to make sure that it has the latest technology, has the latest designs. At the right time, when we felt confident enough, we would then have started bringing some of those new designs into Phase B as well.
No, Myles, I'm convinced that we have not been underspending on CapEx, and this has not been the event, either the coal dust explosion portion or this issue now with the leaking out of the converters have not been underspend of capital issues. The issue with the water leaks now, the reason that we're stopping is just because we can't isolate and detect the source of that water. Rather than take a chance, because if we have an explosion with water in that furnace, then we will be out for more than a year with no production from Anglo Platinum. I think it was much more prudent, both for the safety of our staff and also for the expedited delivery of material to rather stop and repair Phase B, and we'll be in production a lot faster if we do that.
It is going to mean that we need to shut down for a period of time. Rather than take a risk, both for safety or for having a catastrophic event, we decided to make that call now.
Okay. Is Phase A and Phase B the same size? Is Phase B bigger than Phase A and such?
I think they're the same size. Gary, can you confirm that?
Yes, Chris, they're identical or largely identical in the planned throughput capacity. Of course, A is more recent vintage because we rebuilt it recently.
Yeah. Thank you.
Thanks, Gary. Thanks, Myles.
The next question is from Emily Gosden from The Times. Please go ahead.
Oh, hi there. Hello? Hi. I wondered if, first of all, you could tell me for each of platinum, palladium, and rhodium, how much of the global market does this take out this year?
I don't know. Emily, can we get back to you on that? We know the data, but I just offhand won't be able to reel that off, but we can certainly provide that data to you in the next couple of minutes.
Great. Thank you.
[inaudible] in contact with you.
Thank you. In terms of the kind of causes of this, you just said it's not underspend, but does this not suggest some pretty serious safety failings? Presumably the coal dust build-up, presumably you should have processes in place to stop that. You're saying a number of potential leaks isolated. It sounds like you're still not sure where it's coming from. Does this not suggest some kind of pretty serious safety issues?
No, I would argue that it's because of the need for ensuring safety that we're taking the actions that we are taking. One of the things that you want to avoid at all costs with a smelter is that you don't get water into your smelter. The moment that we detected water in the furnace, Gary and his team, over the last two odd weeks or so, have been spending extensive amount of time pressure testing the cooling systems. Remember, the cooling system sits in the middle of big, thick copper blocks. It's very difficult. You can't see it, for example, from the inside of a hot furnace as to where leaks are coming from. You can pressure test then with water to ensure that your systems are intact.
Through that process, we have identified some areas that a few we were able to isolate and still be safe. When Gary and his team detected water in that furnace, and we were unable to know where it was coming from, rather than take a chance, we've had to stop that. We will take those coolers out, replace them with others, and then we will do tests on those coolers that we've taken out to determine where the leaks have come from. It's exactly for the reason that we want to be safe, that we've taken the course of action that we have.
No, I just wondered also, how many employees there are at the plant that have had to be presumably evacuated or whatever? Just to differentiate between the two explosions you've had, you're saying that this second one with the water in the furnace poses a risk of a catastrophic event. Was the first explosion in Phase A much more minor? Could that have been catastrophic, where people just happened to not be in the wrong place at the wrong time?
I'll let Gary talk to you as well. I'll just make a point is that we've got protocols in place that we call critical controls. For example, when we are starting up a new phase, that's what was happening on the Phase A, when we had the coal dust explosion, when you do a start-up at that time, all people are removed from the furnace floor, there's nobody there at the time. When we did the start-up, it's quite a convoluted explanation as to how we had the coal dust explosion, we were feeding coal into the furnace. When the furnace lance, at the end of the lance, the heat, the fire at the end of the lance went out. There was still a continued feeding that was not noticed, that the fire had gone out, there was a build-up.
When the fire came back on in the lance, there was coal in the converter itself, and there was an explosion contained within the converter. Nobody is allowed near the converter during start-up processes. It was exactly because of our safety protocols in place that nobody was hurt. Again, on both counts, I think our safety processes have meant that nobody has been exposed to these events. Gary, I don't know if you want to add anything to that.
Chris, I think you've covered it adequately. I think the important thing is the start-up protocols or the lance ignition protocols that draw people from the operation. We understand that it's a high-risk procedure, so we withdraw people from the area. The thing about the flameout is that we had also a, let's call it a positive pressure event at the same time due to a blower downstream which had come online. As a result of that, we had the puff of coal dust. I guess a line-up of two or three issues which caused the coal dust explosion, the flameout, and then the ignition and the backup of coal dust from the blower downstream. I don't want to go into too much more detail on that. I think the important thing is that nobody was injured, and we've taken the right decision regarding Phase B.
Thanks, Gary. Emily, does that answer your question?
Thank you.
The next question is from Ephrem Ravi from Citi. Please go ahead.
I just want to know if there were any insurance claims that you could get some money from as a result of this. Is the whole process insured?
Yes. Ephrem, just in terms of the insurance, we have engaged with our insurers. A loss adjuster has been appointed. We'll obviously go through the process in terms of business interruption, and it's something that we're working on as a group at the moment. Yes, that has taken place. In terms of your second question around the restart, there's clearly a protocol that we need to follow in terms of the legal agreements. Our intention is certainly to try and treat everybody as appropriately as possible that we're able to do within the framework of the agreements. That's obviously something that we'll now be working through with the various parties over the coming weeks.
Thank you. Just on the first insurance, can you just give us an order of magnitude? Is it in the tens of millions dollars or is it hundreds of millions?
Yes. As I said, the loss adjuster has just been appointed, and we'll work through that. As Chris outlined a little bit earlier, the impact for us in terms of production, refined production, and effectively sales is about 900,000 PGM ounces lower than what we had previously guided. At current spot prices, that equates to about ZAR 18 billion lower EBITDA than what we would have realized, or roughly $1.1 billion. Clearly, the impact at the half year will be more significant. I think the increases round up to about ZAR 34 billion at the half year, $1.6 billion.
As Chris said, we will look to mitigate that in the second half as we reduce the full impact of the lower refined production and sales, therefore the full-year impact on EBITDA at current spot prices would be about ZAR 18 billion lower or ZAR 1.1 billion. All of these are obviously taken into the mix as we go through the discussions with the various stakeholders.
Thank you.
The next question is from Arnold van Graan from Nedbank. Please go ahead.
Yeah. Chris, thank you very much. Just a follow-up on the earlier question around third-party material. I just want to make sure I properly understand this. Will you be turning away third-party concentrate? Will you still be smelting that concentrate and accumulating the matte? Does it imply third-party material will accumulate in a concentrate form offsite?
The answer to that question is, Arnold, is that's something we'll have to work together with our third-party deliveries to determine. As it stands now, the force majeure notice will be notified to third parties to say we can't accept any concentrate because we can't deal with it because it's at the receipt of concentrate that ownership transfers. There may, however, be a discussion to be held with third parties to say if we get some of that material in and get it smelted, it'll reduce some of the pipeline, and then the payment terms for some of the contracts could be reduced. That's detail, though, that will have to be discussed with third parties. As it stands now, force majeure will indicate that the company cannot accept material.
The provisions of force majeure mean that you will try and work with third parties to mitigate some of those effects as far as possible. Some of the things that you mentioned may be part of that mitigation that we can consider.
Thank you very much, Chris. That clarifies it.
The next question is from R. Hochreiter from NOAH. Please go ahead.
Hello, Chris. Sorry about your misfortune. Did I get the number correct? 900,000 oz of 6E for the year. Is that the right number?
That's the right number, René.
Okay. about half of that.
Refined. Refined and sales.
Refined. Okay, fine.
Just to be clear, refined and sold, yeah.
About half of that is platinum, so that should put the platinum market into a deficit for the year.
1/4 of that is palladium, so that should put the palladium deficit into more than 2 million ounces for the year. Have I got the sort of ballpark numbers correct?
Yeah, René, I don't think we want to talk about that. At the moment, what we're trying to do is make sure we can get metal to the market, get metal to our customers. This is not about trying to have increasing deficits of metals. Exactly what that'll look like in what's turning to be a pretty uncertain time in the world at the moment, we'll have to see how that pans out. Our major focus is for our customers to get going as quickly as we can, so that those that supply material to us, we can take that material as quickly as we can. There's other businesses that rely on us, and at the same time, there's customers that need our metal, and we're trying to get back as quickly as we can. What the implications on the market will be, we'll have to see.
No, good. Hope you recover quickly.
Thank you, René.
The next question is from Liam Fitzpatrick from DB. Please go ahead.
Thank you. Two questions from my side. Just wanted to confirm in terms of mine or concentrate production, so you're saying there's going to be absolutely no slowdown in terms of your production levels, and that will fully build up on the balance sheet through the first half? Secondly, I know you don't want to comment too much on the market, but what is your sense in terms of the market's ability to absorb this over the next two to three months? Do you think there are sufficient stockpiles throughout the supply chain to avoid production cuts further down? Thank you.
As it stands now, I think that is an important point, is that the plan is still to continue mining as much as possible so that the metal is not lost to the market. As quickly as we can catch up, we will. I think that is a good point. As far as we can, we will continue. My guess is, although I can't speak for the third parties, the third parties would also seek to continue mining, and so that when they can be on a fairly even basis supply to us, they will. The final point around the market is that we contractually have about 60%-70% of our volumes are contracted.
It's still our expectation that we will meet our obligations for the year to our current contractual customers. Clearly, there is still, in the greater scheme of things, still the ability for the market to be more evenly balanced with substitution of platinum back into palladium. We all know that is probably going to take a bit more time. There is, combined between the metals, an ability to supply all the metals to our customers that they need.
That's all. Thank you.
The next question is from Sergey Donskoy from Societe Generale. Please go ahead.
Yes, thank you very much. I have just one question left, and I am sorry if it was asked at the beginning of the call. I understand that you will be accumulating some inventories, even if you increase processing in the second half of the year. I appreciate it is too early to give any guidance for 2021, as you mentioned before. Just for us to understand the flexibility that you may have, what sort of a headroom will you have in the system, assuming that Phase B is back and running as it is supposed to be, to increase production above the levels that were supposed to be churned out in 2021, in terms of what sort of spare capacity do you have to run through this backlog of mined concentrate?
Thanks, Sergey. We haven't provided then. Those are certainly some of the things that we're still busy working on at the moment. I think if we said that we would catch up the 900,000 oz in two years, then roughly, I think you should just take 50/50 at the moment just to get a feel for what some of that catch-up may look like, and then we'll give more definitive guidance at the half year. Gary, would you have any problem if Sergey used that sort of rule of thumb?
Yes, I think that's a pragmatic answer at the moment. Obviously, the chain is very complex, and it depends on agreements in terms of what concentrates and we produce or do not smelt. If they're coming later, then obviously they're bottlenecking different parts of the process. I think half/half over the next two years is pragmatic.
Thank you very much.
We have a follow-up question from Patrick Mann from BofA. Please go ahead.
Hi, guys. I just realized your previous guidance didn't include the tolling ounces. You've cut this total guidance. I just want to check, it's your own mines and purchase of concentrate. I just want to get a feel, because of the impact on the market, how many tolling ounces you were expecting, and then now what you're expecting to be able to produce.
Patrick, I'll tell you what, let me get back to you on that. I just want to think through, because some of that clearly will depend on what our anticipation is of catch-up in the second half of the year. If we can't give any more definitive guidance than we have now, we'll let you know. As it stands now, clearly there's an expectation that through our third parties, we would try to catch up as quickly as we could. Exactly what that looks like, my guess is going to have to also come out in discussions between ourselves and our third parties, suppliers in the next few days. Then we'll probably be able to get a feel. Currently, as it stands, I think that's about the best guidance that we can give now.
Okay.
Let me just have a look with the team as if there's anything else we need to say, and we'll get back to you on that.
Okay, thanks. Just to make absolutely sure, that 900,000 oz is not including Sibanye-Stillwater as the biggest tolling customer. That 900,000 oz is just the Amplats mined and PoC.
That's correct, Patrick. It's on a like-to-like basis.
Okay.
The 4.2 million ounces to the 4.7 million ounces was toll and mined, it's exactly the same. The 3.3 million ounces and the 3.8 million ounces is on the same basis.
Got it. Thank you.
The next question is from Adrian Hammond from SBG. Please go ahead.
Yes. I have a question for Gary on Phase B units. How long can you run that for uninterrupted? In other words, if you require any maintenance work to be done, when is the first point you need that to be? For Chris, just are there any savings measures you can implement to offset the lost sales, please? Thanks.
Chris, should I go first?
You go, Gary.
Once the repair to Phase B is done, once we've got the coolers in place, there should be no impediment at all to running Phase B until the repairs to Phase A are complete. That is what our plan is, to change over to the good rebuilt unit as soon as we can, and getting that to quarter two 2021, it certainly not going to be or shouldn't be any difficulty for us.
Adrian, just on Phase. Thanks, Gary. On savings, as it stands now, we are still planning to run normally. All of our normal improvement projects, et cetera, at the operations, we would expect all that to continue. Clearly, there will be additional costs. Craig spoke a bit earlier about how much of that gets picked up by insurance. All that we're very unsure of. Clearly, there will be some extra costs of processing that we'll only know in the next couple of months what that looks like. For the rest of the business, we're hoping to run those as close as possible to normal. Certainly in the mining production, continue mining, continue the normal focus, get that material, put it through the smelters, and get the smelted metal ready to be able to be processed at ACP as soon as it's up and running.
Hopefully for the rest of the business, it'll be business as normal. Clearly this is going to be an unusual situation, and you can imagine that we'll be turning over again every penny that we have to make sure that where there's possibilities of savings, we would be. For the rest of the business, for example, what we're not going to be doing is trying to send people home for a couple of months at the mines or something, because if we lose the value of the mined material, ultimately, we would lose that value forever. It still is our anticipation of being able to get that metal to market, to get that metal to our customers that need the metal. Yeah, we'll be turning over every penny, but at the moment, for the rest of the business, hopefully business as normal.
Thanks. Just to understand the 900,000 oz reduction, that two-year unwind of that, is that effectively being cleared by what is spare capacity in your system to make that up?
Yes.
Okay. It's not just a normalization of your inventory?
No.
Okay.
This will be a build-up of inventory that where we've got some capacity, we would use that capacity to unwind the inventory.
Okay. Got you. Thanks.
The next question is from Alan Seccombe from Business Day. Please go ahead.
Hi there. Chris, can you tell me, Natascha Viljoen, who's your replacement, she's Head of Processing at Anglo American. Is she involved in this process at all?
The answer is absolutely. Natascha is on the line if you want to say hi. Natascha has been working very closely with us, and she officially takes over on the 1st of April. We've been working very closely together, and she and Gary have been working very closely together, to ensure that we're all linked up, tied up, and that in the handover to come, that Natascha is 100% up to speed.
Fair enough.
You happy to confirm that, Natascha?
Hi, Chris. Hi, everybody. Yes, I can absolutely confirm that.
The second one from me, if I may. Chris, knowing what you know of your peers, is there spare capacity in their converters and refiners to take your material? Any idea of how much that might be?
The answer is we don't know. Clearly, we know where we think some of that potential may be, but I think the answer is we don't know, Alan. We'd have to start engaging with our peers to see if they've got any ability to pick up some of the slack. Clearly we haven't been able to have that conversation yet because this is such a recent event, and clearly we need to advise the market. We've now advised the market. Now we could go to peers and start having that conversation. We just don't know the answer to that question yet.
Are there refineries in Europe or the States that you could call on as well, or are those too small?
I think the answer generally is that they are too small and are not really configured for the metal that we have. Clearly, Gary, over the next few days, is going to be doing exactly that, calling everybody with from a blowtorch to a furnace to see if there's something we can do and get help with.
Chris, thank you very much.
Okay. Thanks, Alan.
We have a follow-up question from Sergey Donskoy from Societe Generale. Please go ahead.
Yes, thank you. Just one more small thing, just to make sure the numbers that we have are correct. If you could remind us, what was your plan in terms of third-party tolling volumes for this year before the emergency? I understand that you don't provide guidance for what might be now, but what it was before would be helpful. Thank you.
Yes. Again, we don't provide that guidance. It's dependent upon the receipts that we receive. That's the reason why we don't provide that guidance, and you'd have to direct that question to Sibanye-Stillwater.
Okay. Guys, I think we're going to have to call it a day. To the operator, thank you very much for the time given to us to be able to take questions on what's clearly a very difficult situation for us. If there are any further questions, I urge you, if it's media questions, please reach out to Jana Marais, and if there's IR questions, please reach out to Emma Chapman and we'll be able to get back to you. Thanks very much, everyone, and thanks, operator. Thanks, Gary and Natascha, for joining us as well.