It was announced earlier today that Anglo American Platinum has sold three of its labour-intensive, loss-making platinum mines to Sibanye Gold for some R4.5 billion ($331 million). Sibanye, South Africa's biggest gold producer, will pay R1.5 billion upfront, and the balance over the next six years.
The platinum industry is struggling with industrial unrest and falling prices - platinum prices having dropped by as much as 40% since 2011, currently at their lowest in six years. A five-month-long strike at Amplats' Rustenburg operations last year has left the company with little choice but to sell under-performing shafts as part of its move towards low-cost operations. Amplats says it intends to focus on newer, mechanised mines in future.
The company said in a statement:
"We remain committed to pursuing our strategy, continuing to reposition Anglo American Platinum as a high quality, largely mechanised operator yielding high margins."
According to Amplats, the net asset value of the Rustenburg operations as of end June was R7.7 billion, having lost R500 million in the first half of this year.
- Pivotal in the preparation of this deal was Bongani Nqwababa, CFO at Amplats prior to becoming CFO at Sasol. At the same time as last year's strike, Nqwababa led a massive reorganisation at Amplats, taking the company from a volume-based entity to a value-based one. Nqwababa spoke about this at a recent CFO event. Read what Nqwababa said here.
- Our upcoming edition of CFO Magazine will include an in-depth interview with Bongani Nqwababa, mostly on his work at Amplats. Read CFO magazine here.
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