Anglo American Axing 20,000 Jobs in Strike-Hit South African Mine Sale

Anglo American is tipped to be axing around 20,000 jobs as the mining giant plans to sell some of its oldest and most volatile South African platinum mines.

Anglo American Platinum, the world's biggest platinum producer, unveiled on 21 July plans to offload some of its South African assets as it reported a huge drop in half-yearly profit after a five-month-long platinum strike crippled production.

Anglo American Platinum, majority-owned by London-based Anglo American, said it will exit its Union and Rustenburg mines in South Africa and its Pandora joint venture. But it plans to retain its smelting and refining operations in both Union and Rustenburg.

The firm also said it is assessing its Bokoni operation.

Anglo's move could render a fifth of its total workforce jobless as the world's biggest metal producer looks to offload non-core assets under a strategic review being shepherded by Chief Executive Mark Cutifani, the Sunday Times reported.

Anglo American's stock was trading 0.29% higher at 0856 BST in London.

Profits Down

The "unprecedented" five-month-long strike at Anglo American Platinum hit the firm's bottom-line -- net profit for the six months ended 30 June, 2014, dropped to 429m rand ($40m, £24m, €30m) as against 1.22bn rand a year ago.

The company said equivalent refined platinum production during the period fell to 715,000 ounces from 1.18 million ounces in the first half of 2013. Refined platinum sales for the first half of 2014 dropped to 1.04 million ounces as against 1.074 million ounces a year ago.

The firm incurred 4.1bn rand in costs because of the five-month-long strike, which ended 24 June.

The firm said in a statement: "Anglo American Platinum has a number of high quality assets, however both management time and capital are finite. Therefore the decision has been made to re-position the portfolio to focus on our assets that can deliver higher margins, lower costs and improved return on capital."

Anglo, the world's fifth-largest diversified mining firm by market value, hinted in April 2014 that it could sell of some of its deep, high-cost platinum mines.

Sibanye Gold, the largest producer of gold in the South Africa, has said it could purchase some of those mines. Analysts told Reuters in April that a sale to Sibanye, which will help preserve jobs, was the most likely option.