Anglo loses shine after platinum plant drama
ANGLO American tumbled after it took emergency measures to avoid a disaster at its money-spinning platinum unit.
The global mining giant led the FTSE 100 fallers after it slashed the production outlook for its platinum division Amplats and declared force majeure as it cannot process any recently mined material sent in by customers.
Force majeure – a rarely used safety net for major companies – allows a company not to meet the terms of its contracts because of exceptional circumstances.
Amplats problems began with an explosion in mid-February at part of a plant in a chain of platinum-processing facilities in South Africa. Operations were meant to be transferred to another unit – but Anglo has found water in that furnace, putting the equipment at high risk of an explosion.
Fixing this ‘ phase B’ unit will take about 80 days – but keeps employees safe and avoids a ‘catastrophic’ event in the meantime.
As outgoing Amplats boss Chris Griffiths said: ‘If we have an explosion then we’ll be out for a year with no production from Anglo American Platinum.’ Anglo owns 77pc of Amplats, which last month reported bumper results.
The closures could lead to another surge in the price of palladium, which is produced alongside platinum – they jumped 3pc and 4pc respectively yesterday.
Palladium is used in catalytic converters, and prices have jumped because it is in high demand from car makers who are moving against diesel vehicles.
Anglo, which this week got approval to buy Yorkshire fertiliser miner Sirius Minerals (down 0.1pc, or 0.01p, to 5.49p), tumbled 8.7pc, or 160.2p, to 1681.2p. The mining group led the FTSE 100 fallers on a day when London’s premier index fell a stonking 3.62pc, or 242.88 points, to 6462.55, amid coronavirus fears.
The FTSE 250 shed 2.98pc, or 576.62 points, to 18746.51.
A slew of companies that put out downbeat updates this week were pummelled further on a tense trading day in which few companies made big gains.
Challenger lender Metro Bank slumped to a record low as investors continued to digest the departure of chief risk officer, Grahame McGirr, who had only spent two weeks in the role. It sent shares 10.1pc lower, down 14.2p, to 126.9p last night.
Government outsourcer Capita lost 47pc of its value in the last week after admitting restructuring is proving more difficult – and more costly – than hoped. The share price fell 11.5pc yesterday alone, dropping 8.9p, to 68.96p.
And Aston Martin, the luxury car maker vulnerable to the effect of the coronavirus outbreak on vehicle sales in China, closed at (another) all-time low – down 10.6pc, or 31.6p, to 265.9p.
Defence group Babcock International dipped 2.3pc, or 9.9p, to 417.7p, after selling its cyber defence consultancy for £107m.
Troubled guarantor lender Amigo, which is embroiled in a spat with founder James Benamor, drafted in its former chief executive Glen Crawford as a consultant. Shares fell another 7.1pc, or 1.9p, to 24.8p.
In a sign that Aviva’s boss is acting on his promise to slim down the company and make it ‘ work better’, the insurance giant announced it would pull out of Indonesia, selling its stake in its joint venture, PT Astra Aviva Life, to PT Astra International.
It declined to say how much the sale would raise. Shares slipped 2.4pc, or 8.6p, to 343p. Even global equities fund Alliance Trust fell into the red, dropping 3.7pc, or 28p, to 740p, as it raised its annual dividend for the 53rd consecutive year. The 2019 dividend is being bumped up 3pc to 13.96p.