Clock ticking for iconic South African company

Anglo American is set to complete the demerger of its platinum business by the end of May 2025 as it looks to transform itself into a miner focused on copper, iron ore, and crop nutrients. 

The timeline for demerging Anglo American Platinum (Amplats) was outlined in further detail by Anglo American CEO Duncan Wanblad in the company’s production report for the first quarter of 2025. 

Anglo had a strong start to the year in its copper and iron ore business, with both performing in line with its guidance at the beginning of 2025. 

Kumba, Anglo’s iron ore business, has had a particularly strong start to the year as Transnet’s performance improves, enabling it to get more of its product to market. 

Crucially, this is likely to result in lower costs for the company as its transport is more efficient and it does not have to store excess production as it has in previous years. 

Apart from the performance of these businesses, much of the focus has been on the significant overhaul of Anglo’s business. 

This transformation has been driven by Australian miner BHP’s failed takeover bid last year, with Anglo CEO Duncan Wanblad pledging reform to stave off any future bids. 

While necessary, this process threatens to make Anglo a shell of its former self and, with promises to sell out of its platinum business and De Beers, potentially unrecognisable.

Anglo has made significant progress in the demerger of Amplats, with the platinum business set to change its name to Valterra Platinum after its annual general meeting in May. 

“We are making good progress with our portfolio simplification as we prepare to complete the transactions through which we will exit our platinum group metals (PGMs), Steelmaking Coal and Nickel businesses,” Wanblad said. 

“The demerger of Anglo American Platinum is expected to be effective from 31 May, subject to shareholder approval on 30 April.”  

The sale of other parts of its business has been much trickier, with Peabody reviewing the deal to purchase Anglo’s steelmaking coal business after a fire at an Australian mine. 

This transaction, along with the sale of Anglo’s nickel business to MMG Singapore Resources, is only set to be completed towards the end of 2025. 

By far the trickiest has been De Beers, with the diamond miner facing immense pressure from man-made alternatives and declining prices. 

In the first quarter of 2025, Anglo finalised a new long-term diamond sales agreement with the Government of Botswana. 

“We continue to pursue a dual track process to divest our interest in De Beers, which we are committed to completing at the right time and when market conditions allow,” Wanblad said. 

End of an era

As part of its demerger, Amplats has proposed changing its name to Valterra Platinum, marking the end of an era for one of the world’s major PGMs producers. 

This name change is subject to necessary shareholder approval at its annual general meeting, which is set to be held on 8 May 2025. 

At the AGM, shareholders will vote on a variety of proposals, including the company’s name change to Valterra. 

“The notice of AGM includes a proposal to change the Company’s name to Valterra Platinum Limited, subject to obtaining the necessary shareholder approval,” the company said in a statement on the JSE’s news service.  

“The Company will remain listed in the platinum group metals (PGMs) sub-sector of the Main Board of the JSE, and the Company’s ISIN will remain unchanged.”

The miner will also retain its historical financial and trading reference data.

Anglo’s unbundling of its PGMs business will free up capital and management time to focus on its copper and iron ore operations, which are higher margin and well-positioned for future growth. 

This continued a process that began in the early 2000s when Anglo unbundled some of its diverse holdings, which included industrial giants such as Mondi. 

The most recent of these developments was the unbundling of Thungela Resources, which holds all of Anglo’s significant coal assets, to reduce the risk of clean-up liabilities at a group level and make the company more attractive to investors sensitive to environmental issues.

“2025 is undoubtedly a year of portfolio and organisational transition for Anglo American, and we will emerge as a highly differentiated, sustainably higher margin and higher return on capital employed investment proposition,” Wanblad said. 

“While the impact of tariffs on the global economy is uncertain in the short term, we have conviction in the strong longer-term outlook for our products, which have scope to become even more important to the changing global economy in the coming years.” 

Anglo’s copper mines in South America are widely seen as some of the highest-quality in the world and have significant potential to increase production with minimal cost. 

The company is planning to increase annual copper production to more than one million tonnes by the early 2030s to benefit from the green transition.

Dubbed Anglo 2.0, the restructuring provides the company and investors with enhanced exposure to profits from copper.

Its competitors, if they want to match this potential production increase, would have to spend billions to build new copper mines that take around 15 years to come online. 

Furthermore, the simplified structure after the restructuring would give Anglo shareholders greater exposure to copper and a superior commodity mix that would result in greater profitability.