(Ecofin Agency) - Amplats, the top producer of platinum in South Africa and a majority-owned subsidiary (79%) of Anglo American, is on the table for a spin-off. This move is part of a broader restructuring effort by Anglo American to revamp its global operations and potentially create a separate, independent company out of Amplats. 

Anglo American Plc is exploring a spinoff of its South African platinum group metals (PGM) operations to create a separate company, the company announced on May 14. This move comes as a response to a recent takeover bid from rival BHP Group Ltd.

The subsidiary, Anglo American Platinum Ltd. (Amplats), would become an independent entity held by existing Anglo American shareholders. Anglo American owns a 79% stake in Amplats, which is the leading PGM producer in South Africa and one of the largest companies listed on the Johannesburg Stock Exchange. Regulatory approvals from South African authorities will be necessary for the spinoff to proceed.

 South Africa's Minister of Mineral Resources previously opposed BHP's takeover bid for Anglo American, which also included the spinoff of Amplats. However, BHP's proposed transaction would have further required the divestment of Kumba Iron Ore Ltd., another South African subsidiary active in iron ore mining. Under Anglo American's restructuring plan, Kumba Iron Ore is expected to remain within the company's portfolio.

Beyond the Amplats spinoff, Anglo American is also considering options for its De Beers diamond business, including a potential spinoff or sale. Additionally, the company is evaluating the sale of its metallurgical coal and nickel assets located in Australia and Brazil. Following the completion of these transactions – which could take months or even exceed a year – Anglo American intends to focus its business on copper and iron ore mining.

"We expect that a radically simpler business will deliver sustainable incremental value creation through a step change in operational performance and cost reduction. Anglo American’s shareholders will see the full undiluted upside from these extensive changes, with the value of our copper and iron ore assets brought to the fore," said Duncan Wanblad, CEO of the mining giant.

Emiliano Tossou