Amplats says it has received no credible offers for South African assets

ANGLO American Platinum (Amplats) delivered good news for its 79% shareholder Anglo American saying half-year headline earnings would come in between R3.28bn and R3.41bn – a performance that represented a $160m net profit contribution to the parent group.
Anglo American Platinum (Amplats) has not received offers for any of its South African assets, the mining company’s chief executive said on Wednesday, following speculation over the possible sale of its higher-cost operations.

Parent company Anglo American prompted speculation in February when CEO Duncan Wanblad said “nothing is off the table” after announcing that the group was undertaking a review of its assets. That followed a plunge in profits and writedowns in its diamond and nickel businesses.

Amplats CEO Craig Miller told Reuters that the miner had not attracted interest in its Amandelbult complex or its mothballed Twickenham platinum mine.

He said the market environment meant investors were more focused on protecting the balance sheet than asset acquisitions.

“I don’t have any offers on the table,” Miller said in an interview on the sidelines of a platinum mining conference in Johannesburg.

“There has to be a willing buyer and a willing seller, I have not received a credible offer for any of our assets.”

He said the Johannesburg miner was taking steps to address costs and improve production efficiency at its Amandelbult complex, which it was also restructuring. Amandelbult has become a sticky point for analysts who have previously questioned the assets’ continued existence in the portfolio because of higher costs.

Amplats said in February it planned to cut about 3,700 jobs with most of the losses coming from Amandelbult.

The higher costs mean Amandelbult remains at risk of lower prices and Amplats may be forced to undertake further cuts at the operation, BofA Securities analysts said in a note.Still, despite the higher costs, the assets were net cash flow positive last year and it can remain in the Anglo portfolio with improved productivity, Miller said.

“Can we reset that cost base and can we fix the operating and performance improvement, we think that we can,” he said. “If we cant, then we definitely need to rethink about how does it fit in the portfolio.”-ebusinessweekly