Anglo American, a major mining company, announced a significant restructuring plan on Tuesday, driven in part by a recent takeover bid from rival BHP. The plan involves spinning off several business units, including its South African platinum arm, Anglo American Platinum (Amplats).
While Anglo was already evaluating its assets, CEO Duncan Wanblad explained that BHP’s bid accelerated the timeline for their decision. BHP had made exiting South African platinum and iron ore a condition of their offer, which Anglo ultimately rejected.
The new strategy involves potentially demerging or selling off Anglo’s steelmaking coal, nickel, diamond, and platinum businesses. This includes a formal demerger of Amplats, a move that caused a temporary dip in Amplats’ share price.
“This isn’t about leaving South Africa,” Wanblad emphasized during a conference call. “We remain committed to the country.” However, the restructuring raises concerns about potential job losses, especially considering Anglo’s previously announced job cuts due to falling metal prices.
South Africa’s Mines Minister, Gwede Mantashe, expressed support for Anglo’s restructuring efforts, hoping it would optimize performance across their portfolio. He also reiterated his opposition to BHP’s takeover bid.
The planned break-up comes at a sensitive time for South Africa, with national elections approaching and economic concerns at the forefront. The main union federation, COSATU, has indicated they will seek assurances regarding potential job losses.
Anglo American, founded in 1917, has been a dominant force in South African mining for over a century. The company currently employs roughly 45,000 people in the country, though job cuts within Amplats and Kumba Iron Ore (another Anglo subsidiary) have already been announced.
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