Wrap Text
Anglo American Platinum takes action to create a sustainable, competitive and profitable platinum
business
ANGLO AMERICAN PLATINUM LIMITED
Incorporated in the Republic of South Africa
Registration number 1946/022452/06
Share code: AMS
ISIN: ZAE000013181
Media release
Anglo American Platinum takes action to create a sustainable, competitive and profitable platinum
business
Anglo American Platinum Limited (“Anglo American Platinum” or “the Company”) has concluded the review
of its business, announced in February 2012, to create a sustainable, competitive and profitable platinum
business for the long-term benefit of all its stakeholders.
As a result of the review, Anglo American Platinum proposes to:
• reconfigure its Rustenburg operations into three mines, with aligned processing operations
• divest the Union mines at the right time – to maximise value under different ownership
• deliver R3.8 billion of annual benefits by 2015, through efficiency and cost reduction initiatives,
including annual savings of R390 million from optimising its overhead structure
• provide a comprehensive package of support to its employees and communities in Rustenburg and
the labour-sending areas
• create at least 14,000 new jobs to balance the number of jobs that may be affected by the
restructuring
The Company’s review of its business is in response to its revised expectations for platinum demand growth
and a number of structural changes that have eroded profitability in recent years, including capital intensity,
mine depths, ore grades, higher-than-inflation unit cost increases, jewellery demand elasticity and increasing
secondary supply of platinum. Anglo American Platinum has previously stated that a number of its mines
have been under considerable economic pressure for some time. The continued operation of unprofitable
shafts within the current configuration, and in light of the Company’s revised demand and cost expectations,
is not sustainable.
Anglo American Platinum therefore proposes to reconfigure its Rustenburg operations into a sustainable
320-350,000oz platinum producer across three operating mines. Four unsustainable, high-cost shafts,
namely Khuseleka 1 and 2 and Khomanani 1 and 2, will be put on long-term care and maintenance. As a
result the production profile will be reduced by approximately 400,000oz per annum with a baseline
production target of 2.1 – 2.3 million oz per annum.
The Rustenburg processing operations will also be reconfigured to align with the revised mining footprint,
which may include closing the Waterval UG2 Concentrator and No. 2 Smelting Furnace.
Anglo American Platinum believes that the Union mines (“Union”) are likely to be of greater value under
different ownership, particularly in comparison to the other attractive growth options in the Company’s
portfolio, and it therefore proposes to divest Union at the right time. In the interim, it is proposed that Union
be reconfigured to protect near-term value, by stopping mining activities at the Union North Declines,
combining Union North and South Shafts into one operation and putting the Mortimer Merensky concentrator
on long-term care and maintenance. The restructuring of joint venture operations has also been reviewed in
order to optimise long-term profitability and competitiveness. This may include rationalisation of farm
boundaries to optimise life-of-mine extensions and other commercial considerations.
Prevailing and forecast market conditions necessitate cash preservation and the optimal allocation of capital.
The proposed restructuring of the operations will ensure more effective capital allocation towards the
Company’s mines that are best placed to sustain and create employment over the long term. The Company
proposes to reduce its planned capital expansion expenditure over the next 10 years by approximately 25%
to R100 billion to focus investment on low-cost, high-margin projects.
In line with the proposed changes to Anglo American Platinum’s mining and processing operations footprint,
the Company proposes to deliver R3.8 billion of annual benefits by 2015 through cost reduction and
efficiency improvements, including savings of R390 million to be achieved through a redesign of the
Company’s overhead structure.
As a result of the proposed changes to the business, a total of up to 14,000 jobs may be affected, 13,000 of
which will be in the Rustenburg area.
Anglo American Platinum will continue to take its social responsibilities seriously, particularly to its
employees and surrounding communities, and proposes to provide a comprehensive package of support to
any affected employees and communities. In particular, the Company will target the creation of at least
14,000 jobs - an equivalent number of jobs to those that may be affected by the restructuring. The job
creation initiatives will focus on housing, infrastructure and small business development in Rustenburg and
the labour-sending areas.
Chris Griffith, CEO of Anglo American Platinum, says:
“The platinum business has attractive underlying fundamentals, but we are facing tough decisions to restore
profitability to our operations. We must evolve to align the business with our expectations of the platinum
market’s long-term dynamics and address the structural changes that have eroded profitability over time. We
have reviewed our business across the entire value chain, building upon the steps taken to improve
operational performance in recent years, and will be consulting extensively with our stakeholders in relation
to our proposed changes.
“We have designed a comprehensive social plan to ensure that we can compensate for any necessary
labour restructuring and make a positive difference through job creation. By creating a sustainable,
competitive and profitable business, we will be in a stronger position to continue substantial investment,
provide more secure and stable employment, and to benefit our customers, suppliers, shareholders – which
include more than one million beneficiaries in our local communities and key labour sending areas via our
Alchemy community share ownership programme and some 48,000 employees in our Kotula employee
share scheme – and the South African economy as a whole.”
For further information, please contact:
Investors: Media:
Kgapu Mphahlele Mary-Jane Morifi
+27 (0) 11 373 6239 +27 (0) 11 373 6638
kgapu.mphahlele@angloamerican.com mary-jane.morifi@angloamerican.com
Mpumi Sithole
+27 (0) 11 373 6246
mpumi.sithole@angloamerican.com
Notes to editors:
Anglo American Platinum Limited is a member of the Anglo American plc Group and is the world’s leading
primary producer of platinum group metals. The Company is listed on the Johannesburg Securities
Exchange (JSE). Its mining, smelting and refining operations are based in South Africa. Elsewhere in the
world, the Company owns Unki Platinum Mine in Zimbabwe and is actively exploring in Brazil. Anglo
American Platinum has a number of joint ventures with several historically disadvantaged South African
consortia as part of its commitment to the transformation of the mining industry. Anglo American Platinum is
committed to the highest standards of safety and continues to make a meaningful and sustainable difference
in the development of the communities around its operations.
www.angloamericanplatinum.com
Anglo American plc is one of the world’s largest mining companies, is headquartered in the UK and listed on
the London and Johannesburg stock exchanges. Anglo American’s portfolio of mining businesses spans bulk
commodities – iron ore and manganese, metallurgical coal and thermal coal; base metals – copper and
nickel; and precious metals and minerals – in which it is a global leader in both platinum and diamonds.
Anglo American is committed to the highest standards of safety and responsibility across all its businesses
and geographies and to making a sustainable difference in the development of the communities around its
operations. The Company’s mining operations, extensive pipeline of growth projects and exploration
activities span southern Africa, South America, North America, Australia, Asia and Europe.
www.angloamerican.com
15 January 2013
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
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