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.
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.