Anglo American’s (LON:AAL) platinum unit, Amplats, is going ahead with its announced plans of selling off its strike-hurt mines in South Africa, as part of plans to divest under-performing assets valued at as much as $4 billion.
The company, Britain’s The Sunday Times reports, has appointed FirstRand Ltd. (FSR)’s Rand Merchant Bank to auction some of its Rustenburg-based mines, which have been in operation since the 1950s.
In an April interview, chief executive officer Mark Cutifani said he didn’t think those mines were key for the company. His statement took on a whole new meaning after Amplats reported it had lost output worth about $1.1bn during the five-month strike over pay at its mines, the same ones that last year accounted for over 40% of the company’s total platinum production.
Sibanye Gold (NYSE:SBGL) —South Africa’s top bullion producer— has been repeatedly hinted as the most likely buyer for Anglo’s mines in the platinum belt.
Cutifani, who became CEO in April 2013, said last year he considered performance at the mining group to have been “unacceptably poor” and set a goal of improving Anglo’s return on capital to at least 15% by 2016 from about 8% in June.
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.
Mark Cutifani delivering a speech at Mining Indaba 2013, via YouTube.