Diversified mining firm Anglo American might sell its platinum assets in South Africa, valued at $1.4 billion (R15bn), next year, Deutsche Bank speculated yesterday in a note.
A sale would increase fair value for Anglo’s stock by 13 percent to £17.50 (R318 at yesterday’s exchange rate), said Rob Clifford, a Deutsche Bank mining analyst.
Sibanye Gold, South Africa’s second-largest gold producer, might be interested in the company’s three mines in Rustenburg, while an offer from platinum peers was unlikely, he said. “We think this offers Anglo the cleanest exit, minimising legacy closure and employment obligations.”
Subsidiary Anglo American Platinum (Amplats), the world’s largest platinum producer, had been rocked by the strike at its Rustenburg and Union mines since January 23.
Anglo planned to switch to mechanised open-pit mining from labour-intensive underground excavation, the chief executive, Mark Cutifani, said in April.
The company was seeking to exit its high-cost, low-return mines in Rustenburg in 2015, Clifford said. “There is an opportunity for a new owner of the Rustenburg mines to take out costs. Some industry participants are looking in general at mergers and acquisition opportunities in the platinum industry. The ongoing strike may bring some of those opportunities to fruition.”
About 37 percent of Anglo’s assets are in South Africa and generate 55 percent of operating profit. They include Kumba Iron Ore operations, the Venetia Diamond Mine in Limpopo and the Zibulo Colliery in Mpumalanga.