Anglo American Plc is more likely to sell or shut platinum mines than spin off its stake in the world’s largest producer of the metal after a review, analysts at Deutsche Bank AG, RBC Capital Markets, Panmure Gordon & Co. and Avior Research Ltd. said.
“Closure of shafts is most likely given the structural position” of the platinum group metals market, Deutsche Bank analysts Grant Sporre, Tim Clark and Rob Clifford wrote in a note to clients today.
Selling all of Anglo American Platinum would cut Anglo’s market value by about $15 billion, making it an “easier takeover target” for parties including a combined Glencore International Plc-Xstrata Plc, Clinton Duncan of Johannesburg-based Avior said by e-mail.
Anglo Chief Executive Officer Cynthia Carroll said Feb. 17 the company’s platinum unit isn’t yielding the returns Anglo expects and it will review the business. Anglo American Platinum last week cut its 2012 output target and put a freeze on employment after annual profit slid 64 percent to 3.59 billion rand ($468 million) and as Europe’s debt crisis weighs on metal prices.
“I would be surprised and disappointed to see Anglo sell off its equity in Anglo Platinum at what is still effectively the bottom of the platinum market,” Alison Turner, a London-based analyst at Panmure, said by e-mail.
The metal, used in devices that cut car emissions and to make jewelry, added 0.8 percent to $1,646.75 an ounce by 10:50 a.m. in London, 28 percent below the 2008 record of $2,301.50.
“I think that right-sizing and focusing on most profitable ounces is the target,” Des Kilalea, a London-based mining analyst at RBC, said in an e-mail. “This could include a review of some assets for sale.”
Anglo American, which produces metals and minerals from Africa to Brazil, owns 79 percent of Anglo American Platinum, the platinum company said in an e-mailed response to questions.