Anglo American Platinum (Amplats) has announced that it will sell a string of its labour-intensive South African mines after a five-month strike rendered them unproductive and burdensome.
The troubled mines account for only a quarter of production, but over half of the company’s workforce.
Amplats said it would now focus on its more mechanised mining operations, after the viability of its other operations came into question after the protracted strike that saw mineworkers awarded wage increases of up to 20%.
Amplats’ assets have been sought by other miners, including gold miner Sibanye Gold, whose CEO, Neil Froneman, has publically stated that Sibanye is ready to snatch up any platinum assets from Amplats should they become available.
According to a Reuters report, Amplats said it would sell its Union mine, its operations at Rustenburg and South African joint venture Pandora, calling them ‘good long-life assets’.
Amplats’ Rustenburg operations employ around 20 000 people while Union has about 7 000, representing over half of the company’s head count.
Value of operations
Some analysts have said the five Rustenburg mines and the Union mine could be worth between $1 billion and $2 billion, but others were far more pessimistic.
Earlier this month, Froneman said that Sibanye could raise $1 billion ‘at the drop of a hat’, but said that the assets identified for acquisition by the organisation was not anywhere near this figure.
Not a fire sale
According to a MiningWeb report, Amplats CEO Chris Griffith said a number of potential suitors had expressed an interest in the company’s platinum operations.
“This is not a fire sale,” he said, holding out the possibility that the mines could be listed if they don’t find a buyer.
Griffith said the company had not been forced to sell because of the strike, insisting it had been repositioning in favour of less labour-intensive activities for some time.