Anglo to Make ‘Tough Call’ on Platinum If Profits Don’t Improve
Anglo American Plc (AAL)’s chief executive officer said he will close or sell more mines at the company’s South African platinum unit if profits don’t improve next year.
Anglo American Platinum Ltd. (AMS), the world’s biggest producer of the metal, is reducing staff, idling shafts and shrinking annual output by 350,000 ounces to revive earnings growth. Earlier this month, the Johannesburg-based company said it may cut as many as 6,900 jobs.
“I’d expect that we can see the turnaround and that we can see it on the ground next year,” Anglo American CEO Mark Cutifani said today in an interview in Johannesburg. “At the end of the day if we have shafts or operations that don’t make money, then we’ll make the tough calls.”
Platinum producers in South Africa, which has the largest known reserves of the metal, are seeking ways to curb costs after strikes last year led to above-inflation wage increases while prices dropped.
Amplats, as the Anglo American platinum unit is known, will have to deliver a return on capital of 15 percent, in line with the rest of the group’s business units, Cutifani said.
“If operations bleed cash then they will be closed or sold,” said Cutifani, who took over as CEO of Anglo American in April. “If they are not delivering the returns but they are creating cash, they certainly wouldn’t be closed, but they would be considered for sale.”
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