Anglo American Plc may sell strike-hit platinum mines in South Africa valued at about $1.4 billion next year as it reviews global assets, Deutsche Bank AG said.
A sale would increase fair value for Anglo’s stock by 13 percent to 1,750 pence, Rob Clifford, a Deutsche Bank mining analyst, said in a note. Sibanye Gold Ltd. may be interested in the company’s three mines in Rustenburg, while an offer from platinum peers is unlikely, he said.
“We think this offers Anglo the cleanest exit, minimizing legacy closure and employment obligations,” Clifford said.
Anglo American Platinum Ltd., the unit that is the world’s largest producer of the metal, has seen output disrupted by South Africa’s longest and costliest mining strike. Anglo American plans to switch to mechanized open-pit mining from labor-intensive underground excavation, Chief Executive Officer Mark Cutifani said in April.
The company is seeking to exit its high-cost, low return mines in Rustenburg in 2015, Clifford said.
“There is an opportunity for a new owner of the Rustenburg mines to take out costs,” he said. “Some mining industry participants are looking in general at M&A opportunities in the platinum industry. The ongoing strike may bring some of those opportunities to fruition.”
Anglo should keep offloading underperforming platinum assets including the Union mine after 2016 and focus on its Mogalakwena open pit, he said.