Ed Stoddard

Coal producer Exxaro hopes to diversify into platinum group metals (PGMs) and is looking at opportunities, which could include Anglo American Platinum (Amplats) assets.

“We scouted around in PGMs and think there are some interesting opportunities that are emerging,” Mzila Mthenjane, Exxaro’s executive head of strategy, told the Reuters Africa Investment Summit yesterday.

“It’s across the board, from existing single assets that are being developed to potentially what could fall out, with some of the restructurings that are being spoken about,” he said, referring to the expected shakeout at Amplats after the massive strike finally ends.

The strike at Amplats, Impala Platinum and Lonmin enters its 12th week today.

A drastic post-strike overhaul looks certain, and Anglo American has signalled it could divest some of its loss-making platinum assets, including the Rustenburg operations.

In the case of Amplats’s Rustenburg operations, which were bleeding cash even before the strike, it could be a buyer’s market at the moment.

Mthenjane stressed, however, that Exxaro would not rush into any deals: “I think at the moment we are likely to focus more on the existing portfolio. It would have to be a really good deal for us to look at a new commodity.”

PGM production was “an industry that’s faced with its challenges. One would also have to take a view as to what’s on the other side, when the dust has settled around the industrial relations issues,” he said.

Exxaro shares shed 1.32 percent to close at R145.50.

Exxaro’s portfolio includes a stalled iron ore project in the Republic of Congo. Exxaro said it would not allocate more funds for the project until it had finalised agreements on the use of rail and port facilities when production started.

Mthenjane said Exxaro hoped those agreements would be signed by the middle of this year. – Reuters