Diversified major Anglo American is making sure of keeping its credit rating by pledging to cut nearly $200-million out of the troubled Anglo American Platinum (Amplats) capital exenditure (capex) by year-end and lopping $1.5-billion off overall 2012 group capex.
The downward revision of the previously guided capex is from $7-billion to $5.5-billion.
On platinum, which is also under a full- frontal review, Anglo CEO Cynthia Carroll says: “We’ll go beyond our capital reduction target for platinum and deliver a cut of almost $200-million by the end of the year.”
In addition to the $1.5-billion group cut for 2012, $200-million less will also be spent on exploration and early study development this year.
A capex funding target of $6-billion has been set for 2013 and next year’s exploration and early studies funding target will be $600-million, down $300-million on 2012.
Carroll says that there is “no silver bullet” for platinum’s woes and the group’s platinum review process is not being rushed.
Platinum’s current 11% profit margin, though in line with the current industry norm, is regarded as unacceptable for the medium to long term, and Amplats’ review to assess the optimal configuration of the portfolio will take time.
“We will look at the entire value chain, from resources to mining to process sales and marketing and people, and no option is off the table, and we will retain platinum as a part of Anglo American as a starting point,” Carroll reiterated.
New CEO Chris Griffith would implement the review decisions from September 1 and 60 000 oz of high-cost platinum had already been taken out of the system and the study into high-cost ounces was ongoing.
The key objective was to thoroughly access the options available to establish a long-term portfolio with sustainable competitive advantages that would maximise value.