Anglo American Could Sell Strike-Hit South African Mines: CEO Mark Cutifani

Mining giant Anglo American could sell its unrest-hit South African platinum mines to focus on open-cast extraction.

The London-traded firm's mines in South Africa's platinum belt of Rustenburg, north of Johannesburg, have been inoperative for nearly three months. The region is home to the world's largest platinum deposits.

About 80,000 miners are on strike and have declared they will not return to work until their minimum monthly wage is doubled to 12,500 rand, (£710, €858, $1,189). The mines are labour-intensive and shafts are often deep, making mechanisation a costly affair.

Anglo American says that demand, if met, would ruin its platinum division.

The status-quo has forced the firm to tap into its reserves, which in turn is hitting its profits.

"The Rustenburg resource is no longer what it used to be," Anglo American chief executive Mark Cutifani told South African newspaper Business Day.

"I don't think that's where our best skills set sits."

"That's why I've been quite vocal saying we should consider taking a back step from Rustenburg," Cutifani said.

"We should be focusing on the more mechanised operations which is what I think we do much better, and allow someone who has better skills set in those types of mines to run those kinds of assets," he added.

Sibanye Gold, the largest producer of gold in the country, has said it could purchase some platinum mines once the unrest is sorted.

Negotiations between the firm and the Association of Mineworkers and Construction Union (AMCU), which represents striking workers, have not yielded results thus far, reported AFP.

In February, the world's leading platinum miner Amplats warned of restructuring as its Rustenburg and Union mines, located in South Africa's northern and north-western regions, were "in the most marginal financial position."

Strikes are costing Amplats some $92m a day as production has dropped by 4,000 ounces of platinum per day.