Anglo American holds fast to its prime assets

For Anglo American, life will have to get a whole lot worse before it considers selling its best copper mines.

Johannesburg - For Anglo American, life would have to get a whole lot worse before it considered selling its best copper mines.

“We don’t need to sell them. Anglo is not in that position,” Anglo’s copper chief Hennie Faul said on Monday. The entire industry would be in turmoil for Anglo to have to sell its prime assets, he added.

Read: Anglo American to sell subsidiary

The century-old company was trying to engineer a turnaround by selling more than half its other mines and exiting the iron ore and coal business to focus on its best assets – producers of diamonds, platinum and copper. Anglo wanted to raise $4 billion (R60.12bn) from selling mines and reduce its net debt to less than $10bn this year.

The price of copper had rebounded 10 percent from a six-year low of $4 318 a ton in January, sparking a turnaround in Anglo’s shares, which jumped 73 percent this year in London.

That helped relieve some of the urgency of enacting Anglo’s rescue plan unveiled in February by chief executive Mark Cutifani.

While the company was selling everything from coal in Australia to niobium in Brazil, there had been speculation that its best two copper mines, Collahuasi and Los Bronces, were the sort of projects larger rivals such as BHP Billiton and Rio Tinto Group would be interested in buying. Both said they would like to add high-quality copper mines.

“There’s been speculation in the market, but I certainly didn’t have people falling on my doorstep to come in with testing offers,” said Faul.

While Anglo was keen to keep its flagship copper projects, the sales process for its lower-quality mines continued. Anglo, which planned to reduce employee numbers to 50 000 from 135 000, sold its Norte copper unit in Chile last year and was also looking to off-load its El Soldado copper mine in the country. “It’s still seen as non-core but we haven’t actually started the official sale process for it,” said Faul. “The market is probably not at the right time now to start that.”

In the longer term, Faul said Anglo wanted to expand both Collahuasi and Los Bronces but given the current market and stretched finances now was not the time.

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