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Amplats considers sale of Twickenham and Bokoni mines – CEO

The move could potentially complete Amplats’ divestment strategy.
 

Anglo American Platinum is contemplating the sale of its Bokoni and Twickenham mines in South Africa, a move which would mostly complete the group’s divestment strategy, its chief executive told Reuters.

The precious metals producer has sold many of its mines as it pivots from the labour-intensive methods that have defined South African platinum mining to more mechanised operations, but struggled to dispose of loss-making Bokoni.

Higher prices for the basket of precious metals sold by South African miners and a weaker rand currency have improved operating conditions for companies struggling to make profits.

Read: Palladium boom gives South African miners only temporary reprieve

“It’s a good environment to come back to the market for Bokoni,” said Chris Griffith in London, adding that a sale of the Twickenham mine may also be an option to consider.

Bokoni Platinum Mine, a joint venture with Atlatsa Resources , was put on care and maintenance in October 2017 while Twickenham was shuttered in 2016.

Griffith said Amplats aimed to improve efficiencies, mainly at its flagship mechanised Mogalakwena mine.

“Our focus now is not on portfolio repositioning but on taking the next steps in our efficiency improvements.”

Dividend boost

Amplats, a unit of London-listed Anglo American, is conducting studies that could see output at Mogalakwena rise around 500 000 platinum group metal (PGM) ounces over the next four to five years. It produced 1.2 million ounces last year.

One of the options to raise output includes a third concentrator, which turns ore into concentrate that is eventually processed into metal.

Griffith also said the company could consider paying higher dividends next year if cash on its balance sheet increases.

Earlier this year Amplats hiked its dividend payout policy to 40% of headline earnings from 30% previously after declaring its largest dividend since 2008. It resumed dividends in 2017 for the first time since 2011.

“If (cash) really starts growing then of course we’ll consider more payout to shareholders but at this point in time we think the payout is correct,” he said.

Amplats also plans to build a R1 billion ($70 million) solar project that could see it producing between 75-100 megawatts of power at Mogalakwena.

It joins other miners such as Harmony and Sibanye-Stillwater who are looking at generating their own power to reduce their reliance on SouthAfrica‘s struggling national grid.

“We’re very close now to being able to take that to our board… we would anticipate doing that in the next couple of months,” said Griffith, adding that he was encouraged by signs of red tape related to power generation being removed.

Griffith was referring to moves by the government to ease rules for independent power producers, a move welcomed by heavy power users such as miners and smelters.

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