AMPLATS GETS LEANER AND MEANER

CityPress - - Business - DE­WALD VAN RENS­BURG de­wald.vrens­burg@city­press.co.za

An­glo Amer­i­can Plat­inum (Amplats) this week con­sum­mated the last ma­jor trans­ac­tion on its way to be­com­ing a far smaller, but more prof­itable, com­pany.

Like other parts of the An­glo Amer­i­can group, Amplats is fo­cus­ing on pay­ing debts and bring­ing in all the cash it can.

This means no div­i­dends and no new projects, along with sell­ing as­sets and now also ne­go­ti­at­ing pre­pay­ments with cus­tomers.

The com­pany’s net debt fell from R12.8 bil­lion at the end of 2015 to R7.3 bil­lion at the end of 2016.

A large part of the cash for this debt re­duc­tion came from get­ting a new cus­tomer to pre­pay for plat­inum de­liv­ered over a six­month pe­riod, pro­vid­ing R2 bil­lion cash up­front in the fi­nan­cial year for which the com­pany re­leased re­sults.

These 2016 re­sults in­clude the Rusten­burg mine complex and other non­core as­sets for the last time, but still re­flect the out­come of Amplats’ vig­or­ous re­struc­tur­ing over the past few years.

The R12.4 bil­lion loss posted in 2015 was mostly as a re­sult of write-offs.

How­ever, head­line earn­ings – a met­ric ex­clud­ing the ef­fects of write-offs – amounted to R1.9 bil­lion in 2016, com­pared with a small head­line loss of R126 mil­lion.

In the course of 2016, Amplats sold its Rusten­burg mines to Sibanye Gold for an ini­tial R1.5 bil­lion cash – and a pos­si­ble R3 bil­lion more, de­pend­ing on how Sibanye fares with these mines.

Amplats’ other sales are near­ing com­ple­tion, in­clud­ing the sale of its 42.5% stake in Pan­dora mine to Lon­min and sell­ing parts of the long-dated min­eral re­sources of its Aman­del­bult mine to Northam Plat­inum for R1 bil­lion.

A 50% share in the Kroon­dal mine is con­sid­ered non­core, but there are no talks to sell it to any­one at this point, the com­pany said.

Amplats also an­nounced the sale of an­other mine, Union.

The buyer is Siyanda Re­sources, an un­listed black-ma­jor­ity min­ing com­pany with a va­ri­ety of min­ing as­sets, chief among which is a stake in Kala­hari Man­ganese.

All these deals come with shares for Amplats in fu­ture cash flow for a few years.

All the as­set sales also come with re­fin­ing deals that will see Amplats buy the mines’ con­cen­trate and con­tinue to re­fine and mar­ket the metal it­self.

Af­ter a few years, these con­vert into toll­re­fin­ing agree­ments, whereby Amplats re­fines the metal for a fee and then gives it back to the other min­ing com­pa­nies.

At a pre­sen­ta­tion this week, CEO Chris Grif­fith said the toll-re­fin­ing deals were more ben­e­fi­cial to An­glo than the ini­tial con­cen­trate-buyer deals.

While Amplats is sell­ing much of its min­ing port­fo­lio, it will re­main king of the hill as far as the pro­duc­tion of re­fined plat­inum is con­cerned, be­cause it is re­tain­ing all its smelt­ing as­sets.

In 2016, it pro­duced 2.33 mil­lion ounces of re­fined plat­inum, of which 28% was from other com­pa­nies’ mines.

Ac­cord­ing to spokesper­son Mpumi Sit­hole, af­ter com­plet­ing the sale of Union, Amplats will pro­duce roughly 2.4 mil­lion ounces, of which 38% will em­anate from other mines.

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