Anglo American CEO Mark Cutifani. Picture: MARTIN RHODES
Anglo American CEO Mark Cutifani. Picture: MARTIN RHODES

ANGLO American is seeking a buyer for its Rustenburg platinum mines as the group looks elsewhere to extract the metal, CEO Mark Cutifani said on Friday.

In a BusinessDay TV interview with editor Peter Bruce, Mr Cutifani said the skills within Anglo could be better deployed elsewhere than the deep-level, labour-intensive and technically complex mines that make up Rustenburg.

The mines under consideration are operated by Anglo American Platinum (Amplats), an 80% held Anglo subsidiary.

Mr Cutifani has indicated before that Rustenburg was no longer a core asset, but this was the first time he has been explicit about wanting another party to own the mines.

His comments have a deeper resonance as a strike at the mines enters a third month.

"The Rustenburg resource is not what it used to be," Mr Cutifani said.

"I don’t think that’s where our best skills set sits.

"That’s why I’ve been quite vocal saying we should consider taking a step back from Rustenburg. We should be focusing on the more mechanised operations, which is what I think we do much better, and allow someone who has a better skills set in those types of mines to run those kinds of assets," he said.

This focus in Amplats is likely to shift to the Mogalakwena mine in Limpopo.

It is a large opencast operation, which can be expanded to 420,000oz of platinum from its current output of 330,000oz.

Mogalakwena could be taken to 600,000oz in the future, replacing the output that Amplats would lose from selling its Rustenburg mines.

Sibanye Gold, the company formed after Gold Fields unbundled its three deep gold mines in South Africa, has said it is interested in Amplats’ mines.

Mr Cutifani said: "We can in an appropriate way, with the support of key players, hand across a Rustenburg with commercial conditions pending in a way that is constructive, appropriate and does the right thing by the people of Rustenburg.

"How we do that is obviously the trick," he added.

Amplats, Impala Platinum and Lonmin, the world’s three largest platinum producers, have lost R12.6bn in revenue to the strike and workers have forfeited wages of R5.6bn.

The strike shows no signs of ending, with the Association of Mineworkers and Construction Union (Amcu) demanding R12,500 a month for a basic, entry level salary over four years, representing a 30% increase.

Companies are offering 9%, 8.5% and 7% a year increases.

Mr Cutifani said: "The platinum strike is about taking a stand, being a leader and making sure people understand what we need to do to be successful. If it means we have to strike then we’ll take a strike."

He told Business Day in February that Amcu was not listening to the warnings from the platinum companies that the bulk of their mines were unprofitable.

"They’ve got their elbows in their ears. There is no future at Rustenburg if we don’t get back to work and try to set out a successful business model," he said at the time.

"People are ignoring the facts and that’s what’s worrying me.

"I’m worried about the people who are being led down the wrong road. It can only end badly for employees and that’s the thing that keeps me awake at night," he said.

Asked about the amendments to the Mineral and Petroleum Resources Development Act, Mr Cutifani said there were areas of concern that were negative for investor sentiment.

"However, the engagement with the government was constructive.

"They took many of our points on board and it was a piece of legislation that we can support and live with, but I’ll still lobby for changes to make sure South Africa has a better industry structure in the future."

The greatest concern did not affect mining directly, but pertain to government stakes in the nascent oil and gas industry.

The amendments give the government a 20% free carry in a venture and the right to buy another 80% at an agreed price.

"That really is negative for the industry. It sends out the message that in South Africa we’re not quite sure we want investment in natural resources. We’ve got to deal with that," he said

"We were able to navigate a solid outcome in the mining industry. Not what I’d like to see, but to be fair you don’t always get what you want."

Unlike Australia, changes to the mining laws are being made in consultation with the industry.

In Australia, there was no discussion around the imposition of a supertax and a number of other taxes.

"The reputational damage to Australia was a disaster," he said.

To attract foreign investment to South Africa, the government would have to keep its legislative environment as little changed as possible, Mr Cutifani said.