Global platinum producer ponders asset offload

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 06 May 2014   Posted by admin


PRIMARY global platinum producer Anglo American is considering divesting its South African-based platinum group metals (PGM) assets to focus attention on its other, open pit extraction projects.

Formerly a fundamental division of the giant’s global asset portfolio, Anglo American’s PGM tenements have remained unproductive for nearly three months due to ongoing worker strikes and industrial unrest.

About 80,000 miners from around the Rustenburg platinum belt are on strike and have given an ultimatum not to return to the shafts until their minimum
monthly wage is doubled to 12,500 rand (US$1189).

However, Anglo has repeatedly stated the demand would devastate its platinum subsidiary, if met.
Anglo chief executive Mark Cutifani told Reuters that while the company “liked” PGM, the division was not delivering enough returns to warrant maintenance and operation costs.

“The Rustenburg resource is no longer what it used to be,” Mr Cutifani said.
“We like platinum longer term… but at the same time every asset has to deliver return and if the business can’t deliver return then we’ll look at all options.
“That’s why I’ve been quite vocal saying we should consider taking a back step from Rustenburg.

“We should be focussing on the more mechanised operations – which is what I think we do much better – and allow someone who has better skills set in
those types of mines [platinum mines] to run those kinds of assets.”

Despite ongoing talks between the company and the striking workers’ representative organisation Association of Mineworkers and Construction Union, the dispute has not showed any signs of subsiding.
“Platinum has been one area that has struggled and certainly not because the team is not doing a good job but because we have the strike and in the end we have to make tough decisions,” Mr Cutifani stated.

“I hope the guys come back to work so that we can at least work on what the future might look like – but at the moment it doesn’t look good.”