Anglo mines on sale after profit fall

JOHANNESBURG - Anglo American Platinum (Amplats) [JSE:AMS] 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 R157m compared to R1.3bn in 2013; profit attributable to shareholders was R429m or R1.64 per share and headline earnings were R0.60 per share.

"Net sales revenue of R27.8bn was 15% higher than the R24.1bn in 2013, due primarily to the impact of the weakening of the rand/$ 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% 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% increase, he said.

Members of the Association of Mineworkers and Construction Union (Amcu) at Amplats, Impala [JSE:IMP] and Lonmin [JSE:LON] 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 R1 000 in the first two years of the agreement and R950 in the third year.

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