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"Global Mining Descisions in Your Palms"
“This unbundling will result in a more focused, competitive, and independent business,”
Craig Miller,
Chief Executive Officer,
Amplats.
Anglo American is closing a major chapter in its mining history by exiting the South African platinum sector—a move that could reshape the future of platinum mining worldwide. The decision, expected to be finalized by June 2025, signals a major transition in the company’s approach to its South African operations, particularly amid ongoing challenges in the Platinum Group Metals (PGM) market.
Amplats, which was established in 1995 after the unbundling of Johannesburg Consolidated Investments, has long been a cornerstone of the platinum industry. However, the pressures that have built up over the years have led Anglo American to rethink its position. In the recent years, the company has already pulled back from coal mining, reflecting a broader strategy to streamline its business in response to changing market dynamics.
Additionally, the decision to exit platinum mining is not just about reducing exposure to a struggling sector but it is also about positioning for the future. While Anglo American will retain its interest in Kumba Iron Ore, the move away from platinum mirrors a cautionary stance similar to that taken by BHP when it considered divesting multiple assets.
Also, the PGM sector has been facing a confluence of difficulties which includes declining prices and reduced demand. The global shift towards electric vehicles—many of which do not require platinum for emissions control—has intensified these challenges. In July 2024, Amplats responded to these economic pressures with significant job cuts, impacting around 3,700 employees. This trend is not isolated because competitors like Sibanye Stillwater and Impala Platinum have also made workforce reductions.
Adding to the challenges are persistent infrastructure issues in South Africa, including power shortages that hinder mining operations. Notably, South Africa is home to approximately 80% of the world’s platinum reserves, making these issues particularly concerning for the industry’s future.
Despite these obstacles, Amplats CEO Craig Miller remains hopeful about the company’s prospects as it transitions into an independent entity. He believes that the demerger will allow Amplats to operate more nimbly and competitively.
“This unbundling will result in a more focused, competitive, and independent business,” Miller stated, emphasizing the company’s robust mineral assets and potential for growth in emerging sectors.
Miller also pointed to exciting opportunities beyond automotive applications, noting potential advancements in medical technologies and innovative uses for PGMs. This forward-thinking approach could position Amplats well as it seeks to carve a niche in a rapidly evolving market.
Nevertheless, the financial backdrop for Amplats is sobering. The company reported a 40% decline in headline earnings for 2024, dropping to R8.4 billion, while revenues fell 13% to R109 billion. The rand basket price per ounce also decreased, reflecting broader industry challenges. In light of these difficulties, Amplats still managed to return a substantial amount to shareholders, including a final dividend of R3 per share and an extraordinary cash dividend of R59 per share, totaling R15.7 billion.
Anglo American’s decision to reduce its stake in Amplats from 66.7% to 19.9% is part of a strategic effort to facilitate the spin-off while minimizing market disruption. Post-demerger, Anglo American will no longer have board representation at Amplats and will gradually exit its remaining stake.
The proposed demerger is subject to shareholder approval, with Anglo American planning to seek consent during its Annual General Meeting on April 30, 2025. Assuming regulatory and governance approvals are secured, the process is on track for completion by mid-2025.
Moreover, Miller remains optimistic despite current market pressures.
“Although PGM prices remain subdued at present, we are optimistic about the long-term outlook,” he remarked, signaling a commitment to navigating the evolving landscape of the PGM industry.
As Anglo American charts a new course, the implications of its exit from the platinum sector will resonate throughout the industry, raising questions about the future of platinum mining in South Africa and beyond. The journey ahead will demand adaptability and innovation, but for Amplats, this may also be an opportunity to redefine its role in a changing world.
Conclusively, as Anglo American steps away, all eyes will be on Amplats to see if it can turn today’s challenges into tomorrow’s opportunities, redefining platinum mining in an increasingly electrified world.