Anglo American may sell South African platinum mines: Deutsche Bank

17 June 2014 (Last Updated June 17th, 2014 18:30)

UK-based mining giant Anglo American could sell its $1.4bn South African platinum mines by 2015 in a review of its global assets, according to Deutsche Bank.

UK-based mining giant Anglo American could sell its $1.4bn South African platinum mines by 2015 in a review of its global assets, according to Deutsche Bank.

Anglo's South African platinum operations, managed by Anglo American Platinum, have been hit by what is considered to be the longest and most expensive mining strike in the country.

Deutsche Bank mining analyst Rob Clifford was quoted by Bloomberg as saying that the company is likely to divest its high-cost, low-return mines in Rustenburg in 2015.

"There is an opportunity for a new owner of the Rustenburg mines to take out costs," Clifford said.

"There is an opportunity for a new owner of the Rustenburg mines to take out costs."

"Some mining industry participants are looking in general at merger and acquisition opportunities in the platinum industry. The on-going strike may bring some of those opportunities to fruition."

Although platinum firms may shy away from the offer, Sibanye Gold is expected to be a potential bidder for Anglo America's three mines in Rustenburg, the news agency reported citing the banking major.

"We think this offers Anglo the cleanest exit, minimising legacy closure and employment obligations," Clifford added.

Earlier in April, Anglo American CEO Mark Cutifani told Business Day that the Rustenburg operations were no longer considered to be part of the company's core assets.

The company had also planned to mechanise the open pit mining operations, to move away from labour-intensive underground excavation.

Clifford advised that Anglo should divest its under-performing platinum assets, including the Union mine, after 2016, while focusing on its Mogalakwena open pit.


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