Anglo American shareholders on Wednesday overwhelmingly approved a plan to demerge its platinum group metals (PGM) business — giving birth to a new entity, Valterra Platinum.
The vote by Anglo shareholders to demerge Anglo American Platinum, soon to be renamed Valterra, marks a critical step in the portfolio simplification efforts led by CEO Duncan Wanblad, with the sale of De Beers the last remaining cog in the fulfilment of the restructuring.
Wanblad told shareholders that the group would exit De Beers at the “right” time, saying the group was protecting the value of the diamonds business in what is a “challenging near-term” diamond market.
“We remain on track to be substantively complete with the portfolio transformation by the end of this year — recognising that the timing of our dual track process to divest our interest in De Beers for value, which we are committed to completing at the right time, is dependent on market conditions,” Wanblad said.
Anglo in February wrote down the value of De Beers to about $4.1bn — the second writedown in less than three years.
The company aims to exit De Beers either via a trade sale or a listing — but finding a buyer has proved difficult as the diamond industry faces structural challenges.
De Beers recently came under extreme pressure as young consumers drive a sales boom in lab-grown diamonds. Diamond miners are also grappling with an oversupply.
The 136-year-old De Beers employs more than 20,000 people across the diamond pipeline and is the world’s largest diamond producer by value.
Anglo in 2012 announced the completion of its acquisition of a 40% shareholding in De Beers from the Oppenheimer family. The $5.2bn deal saw the group increase its shareholding in De Beers to 85% with the remaining 15% held by the Botswana government.
Anglo last year took a decision to exit its diamond, nickel, PGM and steelmaking coal businesses. The London and Johannesburg listed group has already sold its steelmaking coal outfit for $4.8bn and its nickel business for up to $500m.
However, a fire at Anglo’s Moranbah North underground coal mine in Queensland may have thrown a spanner in the works of the group’s restructuring plans.
The incident took place on March 31, with mining operations at Moranbah being temporarily suspended after high levels of carbon monoxide were detected in the mine shaft.
Moranbah is the largest of the four Australian steelmaking coal mines that Anglo announced in November would be sold to US-based Peabody Energy as part of the group’s portfolio restructuring.
The deal was expected to close in mid-2025, but Peabody cast doubt on the agreement with a statement on Tuesday saying that it was reviewing “all options related to its acquisition of steelmaking coal assets from Anglo”.
After the demerger of Amplats, Anglo will retain a 19.9% interest in Valterra. Anglo has disposed of an about 12% stake in Amplats from its original 79% shareholding.
After the completion of the portfolio simplification exercise Anglo’s portfolio will rest on three pillars: copper, iron ore and crop nutrients.
Anglo chair Stuart Chambers reflected on BHP’s failed bids last year to acquire the group as the Australian mining behemoth looked to enhance its copper profile.
“When we spoke this time last year, we were in the throes of the unsolicited and highly conditional combination proposals from BHP. The board gave serious consideration to these proposals, reviewing them in detail and unanimously rejecting each in turn,” he told shareholders.
“At the same time, the board supported the management team’s accelerated value delivery plans as being in the best interests of you, our shareholders, and — notwithstanding the volatility in the financial markets — I hope you’ll agree that we have delivered on these plans, at pace.”
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