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ANGLO AMERICAN PLC - Anglo American update re. Anglo American Platinum

Release Date: 10/05/2013 12:05
Code(s): AGL     PDF:  
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Anglo American update re. Anglo American Platinum

Anglo American plc (“the Company”)
Incorporated in the United Kingdom
(Registration number: 3564138)
Short name: Anglo
Share code: AGL
ISIN number: GB00B1XZS820

10 May 2013

Anglo American update re. Anglo American Platinum

Anglo American plc draws attention to an announcement issued by Anglo American Platinum
Limited, the text of which is set out below:

Anglo American Platinum announces revised proposals to create a sustainable,
competitive and profitable platinum business

In January 2013, Anglo American Platinum Limited (“Anglo American Platinum” or “the
Company”) announced its proposals to create a sustainable, competitive and profitable
platinum business for the long term benefit of all its stakeholders. Following the announcement
of its proposals, Anglo American Platinum and its recognised unions agreed to suspend the
section 189 consultations to allow for engagement to take place with the Department of Mineral
Resources (DMR) and the unions. At the request of the DMR, such engagement became a
bilateral engagement between Anglo American Platinum and the DMR. The bilateral
engagements with the DMR have now been completed. Anglo American Platinum has
formulated revised proposals which remain focused on improving the profitability and
sustainability of its business, while taking cognisance of the local and national socio economic
challenges.

The Company’s review of the business was in response to its revised expectations for platinum
demand growth and a number of structural challenges that have eroded profitability in recent
years, including capital intensity, mine depths, lower ore grades, higher than inflation unit cost
increases, jewellery demand elasticity and increasing secondary supply of platinum. Anglo
American Platinum’s revised proposals continue to address the objective of aligning the
business with its expectations of long term demand and are an extension of the steps taken to
reposition the business in recent years.

The revised proposals include:

    o   Revising baseline production to 2.2 - 2.4 million ounces per annum in the short to
        medium term
    o   Consolidating Rustenburg into three operating mines through the integration and
        optimisation of Khuseleka 2 and Khomanani 1 and 2 mines into the surrounding mines.
        Khuseleka 1 remains operational which is the principal revision to the previous
        proposal. This will result in a reduction of production capacity of approximately 250,000
        ounces per annum in 2013 and by an additional approximately 100,000 ounces per
        annum in the medium term
    o   Reducing overhead costs and improving efficiencies
    o   Exploring opportunities for further joint venture business improvement and portfolio
        rationalisation

Should these revised proposals be implemented, Anglo American Platinum’s Rustenburg
operations will be reconfigured as a sustainable 320,000 - 350,000 ounces per annum platinum
producer in the medium term.

As originally proposed, Anglo American Platinum’s Union mines will be divested at the right
time and will be reconfigured in the interim to protect near term value. The Company’s review of
its overheads, support structure and costs, as well as the review of its commercial and
marketing strategy will also proceed as planned. Processing operations will be aligned to the
revised long term production plans. The Company remains committed to delivering R3.8 billion
of annual savings by 2015 from the indirect and direct cost savings.

Anglo American Platinum expects that the revised proposals have the potential to reduce the
number of mining and processing jobs affected to approximately 6 000. Anglo American
Platinum will comply with the Labour Relations Act (LRA) and the MPRDA obligations and
these will     include full consultation with unions and employee representatives which will
commence in due course.          As outlined in its announcement of 15 January 2013, Anglo
American Platinum continues to take its social responsibilities seriously, particularly to its
employees and surrounding communities, and has proposed a comprehensive social plan
which will form part of the consultation with employees and their representative structures.

Chris Griffith, CEO of Anglo American Platinum commented: “We have been working diligently
to reach the shared objective of creating a competitive platinum business for the benefit of all
stakeholders. These revised proposals reflect our commitment to South Africa and our role in
addressing the socio economic challenges facing the country, while recognising that we need
to take actions to return the company to profitability. We are hopeful that the revised proposals
will serve as a basis for meaningful consultation with our employees and their representative
structures. The revised portfolio is one that retains flexibility, reduces complexity and will
position us to achieve our goal of creating a sustainable and profitable platinum business.”


Sponsor: UBS South Africa (Pty) Ltd

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