by Clara Denina and Felix Njini

LONDON (Reuters) – Anglo American revealed plans on Tuesday for a potential spin-off of the group to simplify its business structure and cut costs, as the group again rejected a takeover offer from BHP.

It could sell its coal assets, split its South African platinum division, and sell or spin off De Beers, its diamond division, Anglo American detailed in a press release, specifying to expect a drop of 1.7 billion dollars (1.5 billion euros) of its costs. The group will also consider the future of its nickel mines.

The spin-off of the platinum business, called Amplats, is expected to be completed by the end of 2025, said Duncan Wanblad, chief executive of Anglo American, adding that shareholders of the branch listed on the Johannesburg Stock Exchange would not have to bear the costs of the operation.

“I reiterate that the (platinum-related) activities are performing very well (…) and that the diamond-related activities are performing very well, and I expect both groups to do very well,” Duncan Wanblad said.

“But their value within Anglo American is compromised, and this solution is best for shareholders.”

The executive added that the sale of the steelmaking coal business could be quick, given the interest around these assets.

Anglo American lost 1.27% at 10:50 GMT, compared to an increase of 0.07% for the FTSE.

On Monday, Anglo American rejected a new takeover offer from BHP, which it considered “very unattractive” for its shareholders.

BHP offered to buy the group for 27.53 pounds per share, but the buyout would have forced Anglo American to sell its platinum and iron ore operations in South Africa.

The project unveiled by Anglo American is “completely different” in terms of duration and complexity, said Duncan Wanblad.

(With Melanie Burton in Melbourne, Sinead Cruise in London and Eva Mathew, Corentin Chappron, edited by Kate Entringer)

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