Anglo puts South African strike-hit mines on the block

 
Suzie Neuwirth
ANGLO American yesterday confirmed its plans to sell off some of its South African platinum mines, after a five-month strike that slashed production by 40 per cent.

The FTSE 100 company is putting its Rustenburg mine on the block, alongside its stake in the Pandora joint venture it owns with peer Lonmin, so that it can focus on assets that deliver higher margins, lower costs and improved return on capital. It is assessing the Bokoni joint venture asset and will provide an update on this in due course.

Shares in its subsidiary Anglo American Platinum – known as Amplats – surged over four per cent on the Johannesburg stock exchange yesterday.

A bitter wage dispute between South Africa’s three largest platinum miners and the militant Association of Miners and Construction Union led to outbreaks of violence and a drastic squeeze on output.

But Amplats’ sales over the first half of the year only marginally declined to 1.04m ounces, with the company drawing on its stockpiles to compensate.

Earnings decreased to 157m rand (£8.7m) compared to 1.3bn rand the previous year, but beat analysts’ forecasts.

Amplats expects production to recover by the fourth quarter, but trimmed its production and sales guidance to 2-2.1m ounces from the 2.1m ounces previously guided. It has lowered its full-year spending forecast to 5.5-6.5bn rand from 7-8bn rand.

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