Anglo American will be done with the unbundling and London listing of Anglo American Platinum (Amplats) by the middle of the year, but the timing of its planned sale or listing of De Beers remains a question mark as it works to complete the radical restructuring it embarked on last year.
Though there’s still speculation that Australia’s BHP might have another go at taking over Anglo, after last year’s failed bid, Anglo CEO Duncan Wanblad reiterated on Monday that the group was “singularly focused” on unlocking value on the businesses it is separating, as well as those it is keeping in the restructuring. He declined to comment on the possibility of another takeover bid for Anglo itself, but took a philosophical swipe at the notion of industry consolidation globally, saying the world needed more rather than fewer mining companies.
“The industry is likely to consolidate in some way, shape or form, and there is reason for it given valuations in the sector and the macroeconomic climate we are operating in ... I don’t agree with it fundamentally,” he said in an interview on the sidelines of the Investing in Africa Mining Indaba in Cape Town.
“The world genuinely needs the stuff that we do, that other mining companies like us do. Consolidating them all and curating less of it can’t be a good thing for the world in the long run, whether that involves us or not,” Wanblad said.
Anglo announced its “self-help” restructuring in May last year while BHP’s bid was still on the table, though it said at the time that the bid had merely accelerated the restructuring plan. This will cause Anglo to slim down to just its copper, iron ore and fertiliser businesses, shedding its platinum group metals, diamond, metallurgical coal and nickel businesses. Its debt-to-earnings ratio is expected to come down to below 1 as a result, from 1.1 to 1.3 now, Wanblad said, positioning it to grow.
He promised last year that the restructuring would be “substantially complete” by end-2025. The group sold its metallurgical coal assets in a series of deals last year. It also sold down its stake in Amplats to 67%, from almost 80%, placing shares in two bookbuild exercises that raised more than $930m.
The next step is to unbundle the remainder of the stake to Anglo shareholders, with a secondary listing of Amplats shares in London that will make it easier for funds the mandates of which don’t extend to SA to continue to hold their shares in the platinum company.
Wanblad expects to complete this mid-year.
But analysts expect that the group’s 85% share of De Beers will be hard to divest, given the weak state of the diamond market and the questions that the rise of laboratory-grown diamonds have raised over its future.
Wanblad said De Beers was only a question mark in terms of timing. Anglo was running parallel tracks, looking at a listing or a sale. But both relied on more favourable market conditions to succeed. “It would be important for the sector to start seeing a bit of a recovery before we execute on either the sale or the listing, But it feels a bit more positive.”
A sale is likely to be either to someone in the industry wanting to do consolidation, or a mid or downstream player that could help to create value for De Beers, Wanblad said.
Industry sources have said a consortium of De Beers sightholders — might be a candidate, but Wanblad said Anglo was not engaging with any sightholders on a possible deal.
Anglo would by year’s end have set De Beers up as a standalone entity that wouldn’t drag on Anglo in any way, he said.
BHP CEO Mike Henry has made it clear that the Australian group can grow in copper without Anglo, which was targeted mainly for its rich copper assets.
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