Strikes force Anglo American to consider selling mines

April 15, 2014

Anglo American is considering selling its mines in South Africa's platinum belt of Rustenburg, where strikes have disrupted operations for nearly three months.

The company said it will turn its focus to openpit operations.

About 80,000 miners are on strike and have declared they will not return to work until their minimum monthly wage is doubled to 12,500 rand, ($1,189). The mines are labor-intensive and shafts are often deep, making mechanization a costly affair, the International Business Times (http://www.ibtimes.co.uk/anglo-american-could-sell-strike-hit-south-african-mines-ceo-mark-cutifani-1444727) reported.

Anglo American says that the wage demands would ruin its platinum division.

"The Rustenburg resource is no longer what it used to be," Anglo American chief executive Mark Cutifani told South African newspaper Business Day.

"I don't think that's where our best skills set sits."

Cutifani went on to say that he felt the company should focus more on its mechanized operations where, he said, his company has a better skills set.

Sibanye Gold, the largest producer of gold in the country, has said it could purchase some platinum mines once the unrest is sorted, International Business Times reported.

Negotiations between the firm and the Association of Mineworkers and Construction Union (AMCU), which represents striking workers, have not yielded results thus far, reported AFP.

In February, the world's leading platinum miner Amplats warned of restructuring, as its Rustenburg and Union mines, located in South Africa's northern and northwestern regions, were "in the most marginal financial position."

Strikes are costing Amplats some $92 million a day, as production has dropped by 4,000 ounces of platinum per day.

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