(Bloomberg) -- Anglo American Platinum Ltd. shares plunged in Johannesburg after the miner’s parent company announced plans to divest from the precious metals producer.

Amplats shares dropped as much as 10%, the most since April 25, when Anglo American Plc received an unsolicited, non-binding combination proposal from BHP Group Ltd. A main condition of the bid was separate demergers by Anglo of its shareholdings in Amplats — as the Johannesburg-based company is known — and Kumba Iron Ore Ltd. to its existing shareholders prior to the deal.

Shares in Kumba rose as much as 4.7%, touching February highs as Anglo announced that the iron-ore miner will continue to form part of the group. The proposed transformation of Anglo’s portfolio is designed to focus on assets in copper, iron ore and crop nutrients. 

Founded in 1917 by Ernest Oppenheimer, Anglo has long ties to South Africa and was built on the back of the country’s gold mines. The proposed spin-offs highlight the fragile state of the country’s critical mining industry, as the ruling African National Congress struggles to bolster its appeal before elections next month. 

Even before BHP’s proposal, Amplats was weighing thousands of job cuts in a country with one of the world’s highest unemployment rates. 

“The spinoff may trigger an upheaval” among stakeholders as some Anglo shareholders could be reluctant to hold Amplats shares, given the unit’s exposure to South Africa and platinum group metals, Bloomberg Intelligence analysts Emmanuel Munjeri and Grant Sporre wrote in a note to clients.

Amplats traded 7% lower at 730.29 rand as of 10:49 a.m. in Johannesburg.

--With assistance from Ana Monteiro.

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