JOHANNESBURG (miningweekly.com) – The divestment by diversified mining company Anglo American of its residual shareholding in Valterra Platinum was on Tuesday highlighted by enabler Standard Bank as “the largest equity capital markets transaction in the history of the Johannesburg Stock Exchange”.

The placement raised R44.1-billion to help realise Anglo’s strategy of divesting its Valterra stake and simplifying its portfolio to focus on its positions in copper, iron-ore, and crop nutrients, with the cash proceeds from the sale adding to Anglo’s balance sheet strength.

Standard Bank, Africa’s largest bank by assets, acted as a joint global coordinator on the selloff of Anglo’s remaining 19.9% stake in Valterra, South Africa’s major integrated resource-to-market platinum group metals (PGMs) company.

As the only South African bank within the syndicate, Standard Bank unlocked anchor demand that helped deliver a sale of the full residual stake.

The transaction was described by Standard Bank Corporate and Investment Banking Head of Equity Capital Markets, South Africa & Sub-Saharan Africa Richard Stout as a reinforcement of the bank’s leading equity capital markets’ franchise position on the African continent.

Anglo launched an accelerated bookbuild offering of 52.2-million ordinary Valterra shares on September 3 at a price of R845 a share.

Formerly Anglo American Platinum, Valterra mines, smelts and refines PGMs and associated co-products from operations in South Africa and Zimbabwe.

Following the demerger of the then Anglo American Platinum from the Anglo group in May, Anglo retained the 19.9%, with the good performance of the Valterra share price prompting the timing of the sale of its remaining interest in the PGMs producer.

Valterra’s six underground mines and flagship opencast mine form part of an integrated value chain that has marketing hubs in London, Singapore and Shanghai,

Valterra PGMs take in platinum, palladium, rhodium, iridium, ruthenium and osmium. High profile uses of PGMs include jewellery, auto catalytic converters, hydrogen fuel cells, air and water purification units, heart pacemakers, computer screens, hard disks and fertilisers. In recent years, the value of PGMs has seen platinum become an investment commodity alongside gold.

The World Platinum Investment Council (WPIC), of which Valterra is a member, reported, in a Zoom interview with Mining Weekly on September 11, that demand for platinum as an investment product is currently “extremely strong”.

“We’re seeing Chinese consumers who are looking for hard assets that are also liquid. With the increase in the gold price, investors are looking for alternatives and platinum naturally fits into that narrative,” WPIC research director Edward Sterck commented.

“What's really interesting is that where we're seeing the strongest growth in platinum investment demand is in the smaller bar sizes and in coins, which is a clear indicator of broad-based demand.

“We're not talking about high net worth investors here, we're talking about the average consumer, the kind of retail-type consumer whose seeing a value opportunity in platinum,” Sterck pointed out, at a time when the platinum market is forecast to see its third consecutive annual deficit in 2025, which has been brought about by a combination of constrained supply juxtaposed with demand that is proving to be more robust than anticipated.

The mining and marketing of South Africa’s PGMs is very important to the South African economy and the more open the trading of these special metals is, the better.

What is very encouraging is that transparent trading of platinum and palladium by the Guangzhou Futures Exchange (GFEX) is likely to go live in the not too distant future, first domestically in China, and then later become available for international participation.

In this regard, South Africa should grasp the opportunity of making itself available to be part of the international participation that will likely uplift the global liquidity of PGMs. The demand for PGMs is not being matched by supply and the more exposure that the GFEX and other exchanges are able to give PGMs, the better for South Africa.