Anglo American, seeking to shrink its platinum business in South Africa, shortlisted about 10 potential buyers for its Union mine and aims to sell it for about $300 million in the first half of next year, according to people familiar with the plans.
Anglo American Platinum, Anglo’s Johannesburg-based unit, hasn’t yet received any bids from potential buyers, which include Sibanye Gold and Northam Platinum, said the people, who asked not to be named because the information isn’t public.
Anglo, which has been reviewing its operations from Australia to Brazil, is focusing on more profitable, mechanized and open-pit assets in South Africa, the world’s biggest producer of platinum. Chief Executive Officer Mark Cutifani, who joined Anglo in April last year, seeks to increase return on capital to at least 15 percent by 2016 and seeks to sell assets that drag down the average.
The company, which plans to sell four platinum mines and possibly two joint ventures in South Africa, will begin its sale process for three Rustenburg mines next year, according to the people. It will sell shares in the operations in an initial public offering if it fails to find buyers, the company said on July 21.
FirstRand’s Rand Merchant Bank unit, based in Johannesburg, and Credit Suisse AG are advising Anglo American on the sale plans, the people said.
Standard Bank valued the Union mine at R3.14 billion ($281 million), in a note to investors on November 7.
Sibanye, which was created when Gold Fields spun off three aging South African mines in 2013, is a possible buyer of unwanted assets, CEO Neal Froneman said in July. Sibanye believes it can replicate its model of cutting costs, raising output and generating cash for dividends at aging platinum mines, he said.
“Our view of the value of the assets is quite different to what it sounds like the platinum producers’ view of what that value is at the moment, so we’ve cooled on our platinum strategy,” James Wellsted, a spokeman for Sibanye, said by phone. “But that doesn’t mean we won’t participate in the process. That’s very different from committing yourself as a buyer and making an offer.”
Rene Rautenbach, a spokesman for Johannesburg-based Northam, and Anglo American declined to comment.
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