Amplats sale: jobs to go

Anglo American Platinum is to sell a swathe of its most labour-intensive mines after a five-month strike shattered its hopes of making them profitable.

The mines account for over half of the company's workforce but only a quarter of production and their viability was dealt a blow when miners won pay increases of up to 20%. Amplats said it would now focus on its more mechanised mines.

One of the biggest hurdles for would-be buyers will be stiff opposition to any job cuts from unions and politicians. The National Union of Mineworkers condemned the plan to sell the mines.

"Any sale is going to result in job losses and this is a punishment for poor workers," said its general secretary, Frans Baleni, yesterday.

Amplats said it was selling its Union mine, its operations at Rustenburg and South African joint venture Pandora, calling them "good long-life assets".

Amplats' Rustenburg operations employ about 20000 people while Union has about 7000.

Some analysts have said the Rustenburg mines and the Union mine could be worth between R12-billion and R22-billion, but others were more pessimistic.

Excluding the joint ventures Pandora and Bokoni, "we value the combination at a negative $800-million [R8.5 billion]. Simply giving the assets away would be deemed a result," said Nomura analysts.

Citibank said Union was worth R12-billion, but it saw Rustenburg as a liability that would drag down the value of the overall assets by around R14-billion.

"We view the potential sale of these as positive, but already reflected in Amplats' share price," it said.

Amplats shares were up 4.6% in late trading in Johannesburg.

Griffith said a number of potential suitors had expressed interest and insisted at an interim results presentation that "this is not a fire sale".

He said the company had not been forced to sell because of the strike and had been repositioning in favour of less labour-intensive activities for some time.

But the stoppage has clearly forced its hand due to the heavy losses in production.

Amplats parent Anglo American had already signalled its intention to reduce its troubled platinum portfolio.