The listing of Valterra Platinum is an experiment that tests investors’ theory in real time. By carving out the world’s largest platinum group metal (PGM) producer, formerly Anglo American Platinum, or Amplats, into a stand-alone company, parent Anglo American is effectively asking European investors to put fresh value on an old business.
The stakes are high. This demerger was conceived after Anglo fended off a R700bn-plus takeover bid from rival BHP, using asset spin-offs such as platinum as a defensive strategy. Now, the success of Valterra will reveal whether that strategy — and the theory behind it — holds water.
As part of the spin-off, Anglo ensured Valterra took a secondary listing in London — a move designed explicitly to minimise a mass sell-off of foreign investors who won’t or can’t hold a purely Johannesburg-listed stock. Aside from the so-called flowback, Anglo is betting that a stand-alone Valterra will command a higher value in the market, thanks in large part to continued backing from investors in London and beyond.
The theory Valterra is testing is straightforward: European investors will embrace a focused platinum champion if it’s packed right and has a credible story. By listing in London, it instantly became the only pure-play PGM miner on that exchange. The name “Valterra” — itself a fusion of “value” and “earth” in Latin — telegraphs management’s pitch that immense value lies in its earthly assets.
Valterra is selling a story of relevance in a changing world. PGMs have long been used in catalytic converters to scrub car emissions. With Europe pushing to phase out combustion engines, that relevance could wane by 2035. But Valterra insists PGMs still have a bright future in the green economy, saying its prelisting prospectus demand for its metals will endure and even evolve rather than evaporate.
So far, the evidence suggests this theory is gaining traction. For one thing, instead of the feared exodus, most big investors have held on to or increased their stakes in the new company. “I have seen over 90% of Anglo’s shareholders. The majority of those have said they intend to hold on or potentially increase,” CEO Craig Miller is quoted as saying by Bloomberg.
For another, Valterra’s first few days of trading have shown more enthusiasm than panic. On the JSE, the stock gyrated on listing day but rebounded to close higher. A few days later, in London this week, Valterra’s secondary listing got off to an even stronger start. Shares began trading around £28.30 and climbed about 5% within the first hour as new investors stepped in.
The early support suggests Anglo’s European gambit is paying off, but Valterra’s journey is just beginning. And it’s not without challenges. The PGM market remains volatile and the core issue of long-term demand still looms. Two-thirds of Valterra’s output goes into catalytic converters, a segment threatened by Europe’s push into electric vehicles.
Valterra’s pitch is that hybrids, which still need catalytic converters and hydrogen vehicles, will bridge the gap — and that even after 2035, PGMs will find ample uses in fuel cells and other industries. Investors buying into Valterra are implicitly betting on that extended relevance timeline. It is a credible narrative backed by data. For instance, hydrogen deals are rising and hydrogen infrastructure is accelerating in Europe, but it will require execution and perhaps policy support to fully materialise.
There’s also the question of Anglo’s endgame. Anglo’s value unlock strategy is as much about giving the platinum unit a day in the sun as it is about making the parent company leaner, more centred on copper, iron ore and fertiliser that markets will reward. So far, Anglo shareholders are getting a de facto two-for-one: they retain shares in Anglo plus shares in Valterra.
Valterra’s stock market debut at home and in London is ultimately a test of investors’ faith in SA’s PGM riches, in the pace of green transition and Anglo American’s strategy. Early results are encouraging.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.