Anglo American looking to sell four platinum mines in South Africa

July 22, 2014


Anglo American Platinum Ltd. might loose its status as the worlds leading producer of platinum with the sale of four of its mines.

The company’s Johannesburg-based Anglo American Plc (AAL), known as Amplants, is seeking buyers for four mines and possibly stakes in two joint ventures after first-half profit dropped 88 percent because of a five-month pay strike, Businessweek reported.

Assets earmarked for disposal contributed one-third of 2013 production.

The five-month strike ended on June 24 but not before costing more than 70,000 workers about $997 million in wages and pushing South Africa’s economy into contraction in the first quarter as mining output plunged in the country that accounts for more than two-thirds of the platinum extracted globally.

Amplats has had “a number of suitors” for the assets, chief executive officer Chris Griffith Griffith said. “We are in the early stages of the process, so there’s no specific timeline to completion at present,” he said.

Amplats will retain the Mogalakwena open-cast mine, the company’s largest, three other operations and four stakes in joint ventures.

The company said in January 2013 it planned to sell the Union mine and concentrators, north of Rustenburg. It has yet to find a buyer for those assets. The proposed sales will cut its workforce by more than half, reducing the headcount of 50,000 by about 27,000, Griffith said.

Amplats rose as much as 5.2 percent, the biggest intraday gain in more than three months, and was 4.7 percent higher at 478.76 rand at 3:53 p.m. in Johannesburg trading. The stock has advanced 22 percent this year.

The assets earmarked for sale accounted for 34 percent of the company’s attributable output of 2.3 million platinum ounces in 2013. Impala Platinum Holdings Ltd. (IMP), the second-largest producer, had output of 1.6 million ounces in the year through June 2013.

Amplats has opened talks with the South African government on the disposals, Griffith said. Mineral Resources Minister Ngoako Ramatlhodi told reporters in Cape Town on July 15 that he wasn’t overly concerned about Amplats offloading some of its mines, because the shafts would be sold as going concerns and wouldn’t be lost to the economy.

Amplats intends to exit its three Rustenburg operations and the Pandora joint venture. It will retain the remaining smelting and refining assets at Union and in Rustenburg, today’s statement shows. It will consider selling its stake in the Bokoni venture with Atlatsa Resources Corp. (ATL:US)


Related article search: