Anglo American hawks lossmaking platinum mines for $330 million

By Admin
Selling assets continues to be a priority for debt-riddenAnglo American. The company unveiled plans today to sell three of its lossmakingplatinummines i...

Selling assets continues to be a priority for debt-ridden Anglo American. The company unveiled plans today to sell three of its lossmaking platinum mines in South Africa, reaching a R4.5 billion (USD$330 million) deal with Sibanye Gold to offload the declining assets.

The deal will see Sibanye pay R1.5 billion upfront (in cash or shares for the Rustenburg operations) followed by 35 percent of the mines’ free cash flow over a six-year period.

Commenting on the transaction, Chris Griffith, CEO of Anglo American Platinum said the deal was a beneficial transaction for both parties.

“Our focus from the outset has been to identify the right option for the business, its stakeholders and shareholders and we believe we have concluded a beneficial transaction for both parties, whilst also securing a sustainable future for the Rustenburg Operations.”

• Related content: Anglo American - 2015 Interim Results

“We remain committed to pursuing our strategy, continuing to reposition Anglo American Platinum as a high quality, largely mechanized operator yielding high margins. We are focusing on our core assets and exiting those assets we have identified as non-core in a responsible manner, consistent with the objectives of the Mining Charter,” said Griffith.

The agreement ends Anglo’s long ownership of the Rustenburg mines and further reduces the company’s presence in South Africa, its historic home.

For Sibanye, the largest individual producer of gold from South Africa, the deal will assist the miner in furthering its acquisitions in platinum.

• Related content: Anglo American to cut 35 percent of global workforce amid massive writedown

“We have been able to make an entry [in platinum] at a favorable time in the cycle,” said Neal Froneman, chief executive of Sibanye. “We have a long term bullish view on the [platinum group metals] business, but expect the current headwinds to continue for a bit longer.”

The Rustenburg operations have a net asset value of R7.7 billion at the end of June, according to Anglo American. The mines lost R500 million in the first half of 2015.

The deal is expected to take up to 18 months to complete. 

Share

Featured Articles

Environmental certification for Lundin's Candelaria mine

Lundin Mining Corp has announced approval of an EIA to extend operations at the Candelaria copper mining complex in Chile

Lithium Africa and Ganfeng Lithium join hands in Africa

Lithium Africa Resources Corp. and China's Ganfeng Lithium Group Ltd. have created a 50/50 joint venture to accelerate lithium exploration and development

Mesh tech keeps Copper Mountain Mine going during outage

Rajant's Kinetic Mesh networking, BreadCrumb wireless nodes and InstaMesh networking software kept the mine safe at a critical time earlier this year

Diamond mine supports Yellowknife wildfire communities

Sustainability

Launch of China's first mining satellite developed with XCMC

Technology

Perpetua Resources to sign USA Department of Defense deal

Supply Chain & Operations