Anglo American is set to receive a $600 million boost in dividends as the company prepares to spin off its platinum division this summer. This decision follows a significant restructuring phase in the wake of a failed £39 billion takeover attempt by rival BHP last year.
Craig Miller, the CEO of Anglo American Platinum (Amplats), the leading platinum producer globally, shared that the company plans to utilize this demerger as an opportunity to reassess its finances. Total payouts to shareholders will amount to $900 million, with a significant portion directed to Anglo American, which holds a 67 percent stake in Amplats.
The new company will make its debut on the London Stock Exchange after June while also maintaining its presence on the Johannesburg Stock Exchange. However, Miller clarified that an earlier listing in London isn’t feasible due to necessary documentation and shareholder approval processes.
Miller confirmed that Amplats would not shift its focus to mining other commodities. His emphasis remains on producing platinum group metals, with operations centered in South Africa.
Last year, earnings for the platinum company dropped by 40 percent to $457 million, attributed largely to an 11 percent decrease in the average price of the metals, which are primarily used in vehicle engines.
During the earnings presentation, analysts questioned whether the larger payout was a result of pressures from Anglo American rather than coming from Amplats itself. Chief Financial Officer Sayurie Naidoo stated that this payout was essential for restructuring after the demerger, emphasizing that all Amplats mines remain cash-positive.
Anglo American had previously sold its coal division in November and plans to divest its diamond mines, nickel assets, and platinum unit as part of a broader strategy following the BHP takeover approach last year. Even after the demerger, Anglo American will retain a 19.9 percent stake in Amplats, which Miller touted as a “residual stake” to be distributed carefully.
Additionally, Anglo American’s CEO, Duncan Wanblad, mentioned concerns about increased production costs for mining companies due to new tariffs from US President Donald Trump. Amplats also faces potential risks associated with its operations in South Africa, especially with looming sanctions over new land expropriation laws.
Concerning the potential for sanctions on South African platinum exports, Miller expressed that he wasn’t particularly worried, highlighting the vital role of platinum group metals in the automotive industry, which is significant to the U.S. economy.