21st Jul 2014 07:32
LONDON (Alliance News) - Anglo American PLC subsidiary Anglo American Platinum Ltd Monday unveiled plans to sell off major platinum mines in South Africa, as part of its ongoing platinum review, while recording a loss for the first-half of 2014.
The company said the decision has been made to exit its Union and Rustenberg mines, along with its Pandora joint venture operation through sales or public market exits. It is also contemplating an exit from its Bokoni joint venture operations.
The new divestment programme could cut staff in South Africa by 20,000, only a month after five month long strikes ended in the country, according to The Sunday Times.
The move could represent cuts of a fifth of the company's overall workforce and is a key part of Mark Cutifani's plans to cut costs and improve the company's operations since he took over as chief executive last year.
Prior to the market open Monday, Anglo American released a statement saying its platinum mining subsidiary Anglo American Platinum will contribute an underlying loss of USD1 million for the six months ended June 30, which is adjusted to remove special items and remeasurements, and any related tax and non-controlling interests. In the prior year period, Anglo American Platinum contributed an underlying profit of USD92 million to Anglo American results.
Anglo American Platinum also Monday reported IFRS headline earnings of USD14 million, compared to USD140 million a year ago.
The company said on Monday that it expects to keep the remaining smelting and refining operations in both the Union and Rustenberg sites as part of its portfolio.
It also said it will prioritise its open cast operations at Mogalakwena, the company's largest, along with three other mining assets and four stakes in other joint ventures in the country.
"We will create a company that delivers the majority of its production from mechanised mines," said the company, which "offers a more rewarding and overall safer, more sustainable environment for our employees."
The Sunday Times revealed the possible move last month, stating that the disposals would be part of a GBP2.35 billion clearout.
The company's platinum operations employ roughly 40,000 people, and it is the world's biggest producer of the key metal.
Reuters reported in April that if Anglo pushes ahead to divest under-performing platinum assets, a sale to a small South African company is seen as the most likely option.
The news comes a week after Anglo said its platinum production fell 40% in the second quarter ended June 30 as the now-ended platinum miners strike in South Africa hurt operations. The FTSE 100-listed miner said its platinum production fell 40% to 358,000 ounces for the three months ended June 30 from 594,000 during the same period the previous year, as workers from the Association of Mineworkers and Construction Union only returned to work at the end of June.
Anglo American shares were up 0.5% to 1,544.50 pence, putting it in the top ten FTSE 100 risers during early trading on Monday.
By Tom McIvor; [email protected]; @TomMcIvor1
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