End of an era: Anglo-American divests from Amplats
After 108 years in the South African mining sector, the company will be selling off. The company will now be known as Valterra Platinum.
On the 20th of March, Anglo American Platinum (Amplats) proposed to rename itself Valterra Platinum, pending a shareholder approval at its AGM on the 8th of May with the change effective from the 28th.
The rename aligns with a demerger from its parent, Anglo American, set for completion in June, as part of a broader restructuring to focus on copper and iron ore. Valterra Platinum will remain listed on the JSE Main Board in the PGM sub-sector, retaining its ISIN.
Founded in 1995 from the unbundling of Johannesburg Consolidated Investments, this marks the end of an era for Amplats. Anglo-American first entered the South African market in 1917 when German-Jewish emigré Ernest Oppenheimer raised £1 million from J.P. Morgan & Co. and other Rothschild-linked investors to buy out the East Witwatersrand goldfield, dominating the South Africa’s economy for a century.
As central negotiators during the Rand Rebellion, a general strike by white mineworkers opposed to the influx of migrant labour created by the poll tax system imposed on the homeland areas, they halted a proposed nationalisation of the mines in 1924, and were instrumental in the development of the segregation policies used to appease white workers.
Due to the large amount of leverage this afforded the Oppenheimer family, they were well-placed to take advantage of the economic sanctions in the 1980s. After backing the sanctions movement overseas, Harry Oppenheimer and his associates snatched up shares at firesale prices as Western companies sold their local holdings. Their central place across several corporate boards meant that, in the analysis of David Pallister, Sarah Stewart and Ian Lepper in their book South Africa Inc, Oppenheimer controlled roughly 80% of the formal economy, either directly or indirectly, by 1987.
The family exited its mining interests in 2012, nine years after spearheading the establishment of BEE legislation under the Brenthurst Initiative.
Amplats, as the world’s largest platinum producer, has faced a challenging market. A 13% drop in PGM basket prices in 2024, driven by lower palladium and rhodium prices, initiated a strategic re-evaluation of the industry as a whole. The PGM sector faces reduced demand due to electric vehicles - the key industrial function of platinum is in the manufacture of catalytic converters, which are a feature of traditional internal combustion engines. Investment into battery technology that may use PGMs has been extensive, and diversification of investment into “green hydrogen” energy storage have been pursued to replace this market, but results have been ambiguous at best. CEO Craig Miller nevertheless remains optimistic.
Post-demerger, Valterra Platinum aims to be a leaner, more competitive entity. It targets R4 billion in cost reductions for 2025, with all-in sustaining costs below $950 per 3E ounce, leveraging its integrated PGM value chain. Valterra will maintain its primary listing on the Johannesburg Stock Exchange (JSE) and gain a secondary listing on the London Stock Exchange (LSE) around June 2025 to enhance liquidity and appeal to global investors. Anglo American will retain a 19.9% stake in Valterra Platinum to manage "flowback" (shares sold off by investors not interested in a standalone PGM entity). It will exit this stake "responsibly over time" after a 90-day lock-up period, relinquishing board representation.
This is part of a larger corporate restructuring strategy. The demerger is arguably part of Anglo American’s response to the rejected $49 billion takeover bid by BHP Billiton in April-May 2024. Anglo is refocusing on copper, iron ore, and crop nutrients, divesting platinum, coal, nickel, and diamonds. Ahead of the demerger, Anglo reduced its Amplats stake from 79% to 67% via two placements in 2024, raising R16.8 billion. They declared a special dividend of R15.7 billion (R59 per share) plus a final 2024 dividend of R0.8 billion (R3 per share), totaling R16.5 billion, reducing net cash to R1.1 billion. EBITDA of R19.8 billion (down 19% from 2023) and headline earnings of R8.4 billion (R32.05 per share), were reported, impacted by lower PGM prices and R3.5 billion in restructuring costs.
Some analysts question the generous pre-demerger dividend, arguing Valterra Platinum needs a stronger balance sheet amid depressed PGM prices. Yet after the 2.41% share dip to R669.23 on February 6, shares rose 3.95% to R682 after the dividend announcement.
While Anglo retains Kumba Iron Ore, the exit from platinum underscores a shift away from South Africa’s traditional mining strengths, raising questions about the PGM sector’s local future. The success hinges on shareholder approval, PGM market recovery, and effective post-demerger execution, but with global uncertainty around the role of platinum in major industry, predictions remain muted.
