Valterra Platinum: Shares rise on London debut after Anglo American demerger
Shares in Valterra Platinum rose on Monday in a positive start to the mining company’s London debut following its $11bn demerger from Anglo American.
The secondary London listing, in which shares nudged up 1.8 per cent at the end of the first day’s trading, follows an earlier primary listing in Johannesburg. Valterra’s London-listed shares have been distributed to Anglo American shareholders as part of the float.
The stock’s performance had been tipped for an uncertain start due to the fact that the spun-off entity will sit outside the FTSE 100, unlike parent Anglo, sparking a selloff from passive index tracker funds. Around one in twelve Valterra shares are thought to have belonged to index funds.
“I do anticipate that the share price… is likely to be volatile over the coming months as people reposition their portfolios,” Valterra Platinum CEO Craig Miller told City PM.
“There is an element from a passive fund perspective that because of the primary listing they will have to exit the portfolio.
“[But] there’s quite a bit of optimism and interest in Valterra and the stock and the opportunity to buy now.
“I’m confident…you’ll see net buyers as opposed to net sellers over a period of time.”
Anglo’s move to spin off Valterra comes as part of a restructuring in a bid to fend off a hostile £39bn takeover from mining rival BHP. Anglo is also divesting its nickel, coal and diamond businesses as it focuses on its core markets of copper and iron ore.
Valterra, formerly known as Anglo American Platinum, is the world’s most valuable platinum producer. The company produces platinum-group metals, known as PGMs, which include palladium and rhodium and are used in the production of catalytic converters to minimise toxic emissions from combustion engines.
In its prospectus, the firm conceded that prices for palladium and rhodium had slumped 23.6 per cent and 29.7 per cent respectively during 2024, leading to a downturn in revenues over the period.
But Miller insisted that prices would make a recovery amid better-than-expected sales of hybrid vehicles and supply constraints in the market.
“We’ve got a positive price outlook…certainly in the medium to longer term,” Miller told City PM.
“We still believe that there will be sustained and ongoing demand for PGMs.
“We think they will be around for a lot longer than what people were forecasting in terms of the battery electric vehicle market not expanding as aggressively as anticipated.
“That gives us confidence in the outlook for the PGM market, and if you couple that with relatively subdued supply coming out of primary supply South and North America, and also very limited or no growth in the secondary recycled market, that will translate into deficits.”