Sale of Anglo American Mines Could be a Boon for Platinum Prices

Bloomberg reported that plans by Anglo American Platinum (JSE:AMS) to sell its mines in South Africa could give platinum prices a hand, as analysts are predicting that new owners could operate the mines more responsibly.

As quoted in the publication:

The biggest producers, including Anglo American Platinum Ltd. (AMS), have been using profitable assets to subsidize marginal shafts for too long, boosting output and depressing metal prices, said Des Kilalea, an analyst at RBC Capital Markets. The plan by Amplats, as the Johannesburg-based unit of Anglo American Plc is known, to sell four mines will force new owners to either make shafts more efficient or close them, he said.

Mining analyst at Noah Capital Markets in Cape Town, Michael Kavanagh, said:

These guys just cannot carry the expensive assets anymore. When commodity prices are falling, you need to make a plan.

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