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Amplats mines in South Africa’s platinum belt of Rustenburg, north of Johannesburg, have been inoperative for nearly five months. Image of Mark Cutifani from archives.
Anglo American’s (LON:AAL) platinum unit, Amplats, is a step closer to selling its strike-hit mines in South Africa as a now five-month labour action over pay in the sector has forced the firm to dig into reserves, hitting its bottom line.
The operations, valued at $1.4bn, are likely to be offloaded next year, reports Bloomberg citing Deutsche Bank as a source, when Anglo reviews global assets.
The bank’s mining analyst also said Sibanye Gold (NYSE:SBGL) —South Africa’s top bullion producer— could be the one buying Anglo’s three mines in Rustenburg, while an offer from platinum peers was “unlikely.”
This is not the first time reports point to Amplats selling its platinum assets. In April, CEO Chris Griffith warned the parent company was already considering whether it should keep them. “We’re now thinking very seriously: does it form part of the future of this company?”, he said at the time.
Image courtesy of Amplats.
A few days later, Anglo American’s boss Mark Cutifani (pictured) said in an interview he didn’t think the platinum mines were key for the company, adding the board should consider taking a step back from Rustenburg.
South Africa, Africa’s largest economy, holds about 80% of the world’s known platinum reserves, accounting for about 70% of global output, used for jewellery, catalytic converters in vehicles, and as a key source of hard currency for the country, among other applications.
3 Comments
Gary
It was only a matter of time before these mines went up for sale. The strikers have won a hollow victory. One wonders if the Chinese, who presumeably will be interested in buying the mines, will tolerate a 5 month strike
mickeyt
The wekkers are about to find out exactly what kind of new bosses the Chinese are !
Reinhild Niebuhr
It’s time for an ownership shift. Let the communities where the mines are become the owners of the mining rights and let the people working in the mines become the shareholders of the mining company. When last did you see a shareholder go on strike? The mining companies owned by the workers can still employ the specialists they need to get the job done. Put an end to migratory labour and grow sustainable towns and cities, growing the economic base to sustain the community even after the mine is closed. As long as the community where a mine is, is disregarded and as long as ‘disempowered’ migrant labourers live their lives away from their families, there will be social instability. Even the high HIV infection rates among migrant populations can stop, if we stop putting a bunch of men in a hostel, away from their families, for almost a year. Current shareholders can still make a successful exit, by financing the new ownership deal over a couple of years and providing loan finance for expansions and new explorations. Simply handing over ownership to a new, external investor group won’t change any of the structural and labour challenges. We’re in the 21st Century now. Let’s leave old labour paradigms where they belong: in the previous century. There is a win-win-win solution out there. Don’t stop until you’ve found it!