London, England — MININGREVIEW.COM — 22 February 2012 – Anglo American plc is more likely to sell or shut individual platinum mines than to spin off its stake in the world’s largest producer of the precious metal, according to a review by analysts at Deutsche Bank AG, RBC Capital Markets, Panmure Gordon & Company and Avior Research Limited.
“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.
Selling all of Anglo American Platinum would cut Anglo’s market value by about US$15 billion, making it an “easier takeover target” for parties, including a combined Glencore International plc-Xstrata plc bid, Clinton Duncan of Johannesburg- based Avior said by e-mail.
Anglo CEO Cynthia Carroll said last week that the company’s platinum unit wasn’t yielding the returns Anglo expected and that it would review the business. Anglo American Platinum last week cut its 2012 output target and put a freeze on employment after annual profit slid 64% to US$468 million, and as Europe’s debt crisis weighed 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.
“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% of Anglo American Platinum (AMS), the platinum company said in an e-mailed response to questions.