[April 02, 2014]By Silvia Antonioli and Dmitry
Zhdannikov
LAUSANNE, Switzerland (Reuters) — The
chief executive of Anglo American <AAL.L>, one of the world's
largest diversified miners, said divesting the strike-afflicted
platinum division could be an option if it does not perform as well
as the others.
Anglo American's Amplats <AMSJ.J>, the world's top platinum
producer, and rivals Impala Platinum <IMPJ.J> and Lonmin <LMI.L> are
together battling an almost 10-week-old mining strike over wages,
which has slashed about 40 percent of global production of the
precious metal.
The hit from the strike means Anglo could reconsider what place
platinum holds in its portfolio in the future, the company's boss
said in an interview on the sidelines of the FT commodities global
summit.
"We like platinum longer term... but at the same time every asset
has to deliver return and if the business can't deliver return than
we'll look at all options," said chief executive Mark Cutifani when
asked whether he would consider divesting the platinum division.
"Platinum has been one area that has struggled and certainly not
because the team is not doing a good job but because we have the
strike and in the end we have to make tough decisions. I hope the
guys come back to work so that we can at least work on what the
future might look like but at the moment it doesn't look good."
Anglo Platinum said on Tuesday it has sent force majeure notices to
some of the suppliers to its South African mines, underscoring the
widening economic impact of the strike.
Amplats chief executive Chris Griffith said on Friday Amplats was
unlikely to declare force majeure to customers, an industry term for
when a producer is unable to supply due to forces beyond its
control.
Anglo is still producing about 60 percent of its platinum capacity
from some mines that are not affected by the strikes.
Cutifani said that will allow the company to go ahead for months
without depleting its inventories.
The longer the strike continues however, the higher the chances that
some of the shafts might not reopen once activity restarts, the
Anglo boss said.
"Certainly Chris (Griffith) has made it very clear to the guys that
every day that they stay out they place longer term employment at
risk and I think that's a very serious risk that everyone has to
think about," he said.
IRON ORE DERIVATIVES
Anglo is also starting to dips its toes in iron ore derivatives, a
market supported by competitor BHP Billiton <BHO.AX> <BLT.L> that
has gained popularity among financial players and trading houses in
the last few years.
"We are in the market, looking at how we get the best prices for
iron ore and we are looking at all of those options so it's more in
the context of making sure we get the best price for our product,"
Cutifani said asked about the company starting to use the iron
derivatives.
(Additional reporting by Ed Stoddard; editing by Chizu Nomiyama)
