Mining Weekly

Anglo American is exploring an initial public offering of its diamond business De Beers, two people familiar with the matter told Reuters on Tuesday, with one flagging London as the preferred venue. The potential listing was the default option, the second person said, although the process is at an early stage. Both were speaking on condition of anonymity because the plans are private.

The diamond industry has already been feeling the heat. Prices have slumped, Russian sanctions are threatening trade and the emergence of lab-grown gems is eating into some key traditional markets. Now, the sector’s most dominant name is being cast adrift. Anglo American on Tuesday said it will spin off or sell its De Beers business, ending an almost century-long relationship with the industry’s most famous name. The move, part of a wider restructuring to fend off a $43-billion approach from BHP Group, is a seismic shock for the diamond world.

As Anglo American sets out a survival plan that echoes the vision of its suitor BHP Group, the rival mining bosses are now locked in a battle to convince shareholders they are the man for the job. Anglo CEO Duncan Wanblad and his BHP counterpart Mike Henry took center stage on Tuesday, as the personalities behind two of the world’s biggest miners came to the fore. Wanblad presented his own radical turnaround plan to investors, before Henry made his first public remarks on BHP’s bid at a conference in Miami.

South Africa’s mines minister struck a conciliatory tone as Anglo American Plc announced plans to separate its platinum unit as part of a major shakeup following its rejection of two approaches from BHP Group. “It is their strategy and they must do anything that will optimize value,” Mines Minister Gwede Mantashe said by phone.

Diversified mining major Anglo American is targeting value elevation in its planned demerging of South Africa-based Anglo American Platinum (Amplats) and the envisaged divestment or demerger of Southern Africa-dominant De Beers. In rejecting BHP’s second takeover offer, Anglo intends reshaping its portfolio to consist of copper in Peru and Chile, top-quality iron-ore in South Africa and Brazil, and the opportunity presented by the crop nutrients project in the UK.

Precious metals consultancy Metals Focus’ new ‘Platinum Group Metals (PGM) Focus 2024’ report, which offers a comprehensive analysis of the PGM industry, indicates that the rest of the year will be defined by persistent supply constraints, coupled with robust demand, leading to another year of deficits across platinum, palladium and rhodium. “However, high inventories will [also] weigh on prices,” Metals Focus PGM director Wilma Swarts says.

Copper touched its highest level since 2022 after a powerful rally fueled by forecasts of a growing global supply deficit. The commodity’s gain since the start of January is approaching 20% with prices defying typical indicators of soft demand, especially in China. That’s partly because investors see tight mine supply creating a shortfall of the metal as soon as this year.

BHP is likely to sweeten its $43-billion takeover offer for Anglo American for a second time and possibly add cash, investors in both companies said on Tuesday, after the London-headquartered target rejected a higher bid. Anglo said the improved all-share offer, up 10% from BHP's initial proposal, continued to significantly undervalue the company.

The rejection – for the second time – of BHP’s attempt to propose a deal with Anglo American underscores the concerns that continue to persist regarding value and regulatory hurdles in the proposed transaction. Responding to the latest developments in the BHP-Anglo takeover, CreditSight analysts Wen Li and Michael O’Brien assert that the revised bid price proposal still falls short of reflecting Anglo’s value.

Democratic Republic of Congo's government has lifted a suspension order on a Congolese copper and cobalt operation majority-owned by China's Zijin Mining Group, according to a letter seen by Reuters on Monday. Congo's mines ministry last month halted the activities of the COMMUS project, in which Zijin owns a 72% stake, to investigate mineral products returned from South Africa due to overly high radiation levels.

Australian-based Atlantic Lithium, which is developing Ghana’s first lithium mine, has taken a step toward raising capital from equity investors in the country. The company has listed all its shares in issue on the Australian Securities Exchange and London Stock Exchange’s AIM board, on the Ghana Stock Exchange, said Abena Amoah, the Accra-based bourse’s MD. The shares opened at 4.40 cedis ($0.31) apiece at Monday’s launch in Accra.

Diversified major Anglo American has rejected a revised proposal put forward by BHP, which valued the UK-headquartered miner at about £34-billion. Under the revised proposal, unveiled by BHP on Monday, Anglo shareholders would receive 0.8132 BHP shares for each ordinary share they own, as well as ordinary shares in Anglo American Platinum (Amplats) and Kumba Iron Ore, which would be demerged.

Aim-listed Lexington Gold has announced that the prospecting right owned by Jelani Resources has now been formally renewed until May 29, 2026. This follows on the back of announcements made on May 15 and September 7 last year regarding Lexington’s acquisition of White Rivers Exploration (WRE).

Aim-listed Goldplat’s gold recovery operations in South Africa and Ghana achieved a combined operating profit for the third quarter, ended March 31, of £1.6-million (excluding listing and head office costs and foreign exchange losses), a 10% increase on the operating profit for the third quarter in the previous financial year. During the period, the two recovery operations achieved a combined profit before tax of £890 000, after they incurred £430 000 in interest costs and £350 000 in foreign exchange losses, which mainly related to trading activities.

The past three years have witnessed a surge in hard-rock pegmatite lithium mining activity across Southern Africa, according to consultancy firm AmaranthCX. “While Zimbabwe has emerged as the regional leader, countries like the Democratic Republic of Congo (DRC), Namibia and South Africa are also experiencing exploration and development,” the company says.

Gold miner Caledonia Mining says its production and profit was supported by a favourable gold price in the first quarter of the year, which has continued through April and into May. The company’s Blanket and Bilboes mines, in Zimbabwe, recorded a 6% increase in production to 17 476 oz, compared with 16 141 oz produced in the same quarter of last year.

President Cyril Ramaphosa has entered the politically charged discussion on the reasons behind the recent dramatic reduction in loadshedding ahead of what is expected to be a highly competition election and amid allegations that the reprieve is being staged managed to improve the governing party’s prospects and will, thus, not be sustained. Writing in his weekly newsletter at a time which Eskom had refrained from implementing the unpopular rotational power cuts for a period of more than a month and a half, Ramaphosa denied that it was a “political ploy ahead of the elections”, while indicating that it was “too early to say that loadshedding has been brought to an end”.

The outlook for platinum is one that's pretty robust, the World Platinum Investment Council (WPIC) has highlighted in its latest Platinum Quarterly, which shows the projection of the metal's demand as being very encouraging amid a near-record-low supply prediction. Automotive demand is at a seven-year high, while first-quarter jewellery demand increased contrasted with a worsening supply deficit of 476 000 oz.

Anglo American’s shareholders are pushing the company to speed up the release of its turnaround plan as the 107-year-old miner seeks to present an alternative to BHP Group’s takeover bid. Anglo has been reviewing its business since mid-2023, looking at every mine in its portfolio to help reshape a company that’s fallen behind competitors in recent years. Yet that process was broadsided by a takeover approach last month from the world’s biggest miner.

Gold miner AngloGold Ashanti has started the year off well, with a 2% increase in production to 581 000 oz for the quarter ended March 31, despite the impact of heavy rain and flooding on output in Western Australia. CEO Alberto Calderon says the company is seeing greater consistency from most of its operations, including better performance from its Brazilian mines, while the Obuasi mine, in Ghana, continues to ramp up.