Amplats to sell strike-hit mines
Fin24

Amplats to sell strike-hit mines

2014-07-21 09:33

Johannesburg - World No 1 platinum producer Anglo American Platinum [JSE:AMS] said on Monday it planned to sell its Union mine, Rustenburg operations and a joint venture, a widely expected move after it was hit by a five-month strike.

Unveiling its interim results, Amplats said it had lost over 420 000 ounces in production to the wage strike by the hard-line Association of Mineworkers and Construction Union (Amcu). Its headline earnings per share dropped to 60 cents, a fall of almost 90%.

"In our capital-constrained environment, we have decided that we will exit from the Union and Rustenburg mines, and our Pandora JV operation," Amplats said.

"There are a number of potential investors seeking access to the platinum industry and these are good long-life assets with potential that will provide them with that access."

Amplats parent Anglo American had already signaled its intention to reduce its troubled platinum portfolio.

A disposal is probably more palatable to the government and workforce than job cuts, which would have almost certainly been met by fierce political and union resistance.

The front runner to buy Amplats' mines is Sibanye Gold [JSE:SGL] , whose chief executive Neal Froneman told Reuters this month that he wanted a platinum deal before the end of the year and could easily raise $1bn.

But Froneman said he did not think any of the platinum mines Sibanye was looking at were "anywhere near" that price.

Analysts have said Amplats' five Rustenburg mines plus its Union mine could be worth between $1bn and $2bn.

Comments
  • Lebohang Molefe - 2014-07-21 09:50

    The job cuts must be applied across all board. Not only to the miners.

      Deon Louw - 2014-07-21 10:44

      Some of the steel strikers will also join the miners. Striking yourself into poverty and unemployment.

      Karl Kat - 2014-07-21 11:56

      Anglo will keep and relocate workers who have made a difference, for the rest let them go and toi toi in the streets. They will have lots of time on their hands

      Colin Shephard - 2014-07-21 13:33

      Fire all strikers, that the spirit

  • Bomi Bobese Mncinci - 2014-07-21 09:53

    Tanks and I hope our government can take the offer.

      Revelgen - 2014-07-21 10:26

      Since when has 'our government' ever been able to run a business properly? SABC, SAA, Eskom, municipalities - how many MORE failures do you need to see before you wake up?

  • Michael Lewis - 2014-07-21 10:01

    This was inevitable. Goodbye foreign investment. I don't see Anglo getting their asking price though, what company, after witnessing the violent, 5 month long strike, would pay full price to take on that kind of risk? Foreign investors will be wary of investing in South African firms now. Too much toyi-toyiing, not enough working.

  • BLUESILVER2012 - 2014-07-21 10:11

    Don't worry, there is a consortium with ANC links that has been since the strike been interested in buying Plat mines...amazing how it carried on for 5months, ANC did nothing but then again, its always cheaper to buy a company that stocks have fallen....did not take the ANC 5 months to react to the Motor manufactures strikes, but then again, they can't buy them............makes one think.

  • Tony Dakyns - 2014-07-21 10:13

    Watch for the continuing Chinese colonisation of Africa's resources. Once they strike a deal with well connected sources strikes will be a thing of the past and there will be many Chinese labourers who we can do without. South African real employment will continue to drop and there will be more poverty.

      Revelgen - 2014-07-21 10:28

      True, Tony. It's just so sad that SA's semi-literate population of workers just do not understand what is going on until it is too late.

  • Philip Neser - 2014-07-21 13:32

    LOL, We all knew this was coming, you cannot strike and expect to earn money. Clowns run the unions, let see them explain that to their soon retrenched members........

  • Danny - 2014-07-27 18:04

    Perhaps Amplats has seen the writing on the wall with Nationalization and labour strikes and realizes that the best way forward is the fastest way out - I wonder how many others will follow by taking their capital out of South Africa.

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