PIC requests Anglo to spin off platinum

ANGLO American’s biggest shareholder is insisting that the mining house include platinum operations in a package of South African assets that it is considering spinning off, according to a source familiar with the investor’s thinking.

The stance of the Public Investment Corporation (PIC) presents a major hurdle to Anglo chief executive Mark Cutifani.

He has maintained that platinum would be one of the producer’s core commodities, along with copper and diamonds, after the company divests assets in South Africa.

Anglo, whose Anglo American Platinum is the world’s biggest producer of the metal, wants to shrink its global portfolio of mines to focus on its lowest-cost assets while also reducing debt.

Anglo is increasingly favouring spinning off its ironore and thermal-coal assets in South Africa rather than selling them, said a source close to the company, asking not to be identified.

A surge in commodity prices this year has helped cut the producer’s debt burden, reducing its need to raise cash. A spin-off would allow investors to choose whether to sell or hold shares in the new vehicle.

The PIC, which owns 14.5 percent of Anglo according to Bloomberg, wants to create a locally owned mining giant that helps the country achieve its objectives of transforming the economy with more black ownership while also achieving returns for its pensioners.

The PIC would own about 30percent of a spun-off company, a source familiar with the matter said in October.

“Our role is to make Anglo more South African-owned and controlled,” PIC chief executive Dan Matjila said.

A PIC spokesman could not immediately respond to a request for comment.

“We continue to work through all the various options for divesting the thermal coal and Kumba iron ore assets in South Africa,” Anglo said in an e-mailed statement.