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July 20, 2015

Amplats to delay Rustenburg and Union operations sale proposal

South Africa's Anglo American Platinum (Amplats) has announced that it will delay its decision to sell its Rustenburg and Union operations due to a drop in platinum prices.

unki

South Africa’s Anglo American Platinum (Amplats) has announced that it will delay its decision to sell its Rustenburg and Union operations due to a drop in platinum prices.

In an effort to improve profitability and increase its focus on mechanised mining, Amplats said it wants to free itself of the mines.

The company has revised down its capital expenditure forecasts for 2015 to between ZAR4bn ($322m) and ZAR4.5bn ($362m), which will exclude production costs, capitalised waste stripping and interest.

Amplats CEO Chris Griffith told Reuters that Rustenburg and Union generated operating free cash flow of ZAR261m ($21m) and ZAR72m ($6m) each.

Chris Griffith said: "We remain committed to pursuing our strategy, focusing on core assets and exiting those assets we have identified as non-core.

"We remain committed to pursuing our strategy, focusing on core assets and exiting those assets we have identified as non-core."

"In respect of the previously announced exit from the Rustenburg and Union mines, we are still working on both options for divestment, an IPO or a trade sale, and, while it makes sense for us to do so, will keep both options open."

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According to the company, total equivalent refined platinum production increased 55% to 1,108koz compared with the first half of 2014.

In its 2015 interim report for the six months ending 30 June 2015, the company noted that its Mogalakwena mine continued its strong performance, with a further improvement in production to 201koz, representing a 9% increase.

Rustenburg mines including Western Limb Tailings Retreatment also increased 10% on a strike adjusted basis.

Unki production witnessed a 6% increase and production from joint ventures and associates, inclusive of both mined and purchased production, slipped by 4%, the company said.


Image: Amplats’s Unki concentrator plant in Zimbabwe. Photo: courtesy of Anglo American.

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