21 July 2014

South Africa: Amplats Plans to Sell Rustenburg Mines

Photo: Amplats
Khomanani platinum mine in South Africa.

Johannesburg — Anglo American Platinum (Amplats) plans to sell some of its Rustenburg and Union mines, the company said on Monday.

"The intention to exit Union mine [in Limpopo] and concentrators has already been announced, and it has now been concluded that Rustenburg [in the North West] and our Pandora JV asset will be better placed in the hands of new owners who would be able to provide the focus and capital for the operations to have a successful future," CEO Chris Griffith said in a statement.

He said the company was still assessing its Bokoni operation in Limpopo.

"The delivery of our strategy will allow us to focus capital efficiently on the repositioned portfolio, achieving a more profitable, sustainable company for the future," Griffith said.

"We will continue to work closely with all key stakeholders to ensure optimal outcomes for the assets, employees and the South African platinum industry as a whole."

The company said this in an announcement on Monday of its results for the six months ended June 30, 2014, which showed vastly reduced profitability.

Its headline earnings decreased to R157 million compared to R1.3 billion in 2013; profit attributable to shareholders was R429 million or R1.64 per share and headline earnings were R0.60 per share.

"Net sales revenue of R27.8 billion was 15 percent higher than the R24.1 billion in 2013, due primarily to the impact of the weakening of the rand/US dollar exchange rate and a marginal improvement in the US dollar basket price."

Griffith said the dominant feature of the first half was the strike during which 40 percent of Amplats production was not in operation.

"However, we were able to ensure security of supply to our customers throughout the period, and those operations unaffected by the strike showed stable and improved performances," he said.

"Since the end of the strike, we have been working to ensure a safe return to work and rebuilding relationships with our employees and the ramp-up process is proceeding well."

Griffith said Amplat's Mogalakwena mine, Unki mine and Twickenham mine --which was in development -- continued to operate throughout the strike period.

Mogalakwena achieved a record performance, increasing production by 20.4 koz (one thousand ounces) to 184.8 koz, a 12 percent increase, he said.

Members of the Association of Mineworkers and Construction Union (Amcu) at Amplats, Impala and Lonmin downed tools on January 23, demanding a basic monthly salary of R12,500.

The strike ended on June 24 when they agreed to a three-year deal that would increase their salary by R1000 in the first two years of the agreement and R950 in the third year.

The National Union of Mineworkers (NUM) said it was shocked at Anglo American's decision to sell its oldest South African platinum mines.

"Any sale is going to result in job losses and this is punishment for poor workers. We continue to make that appeal for workers to reject divisions and stay united to defend jobs. The proponents of divisions are now nowhere to be found when mineworkers are losing their jobs," said general secretary Frans Baleni.

"The victims are going to be workers while the sellers will be richer and workers will be poorer and unemployed."

He said the union would engage the company in a bid to save these jobs and appealed on workers to work together to safeguard their own jobs.

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