BILLIONAIRE Patrice Motsepe’s African Rainbow Minerals (ARM) is in talks with Anglo American Platinum (Amplats) for the potential acquisition of the Bokoni Mine as consolidation of the platinum group metals (PGM) sector takes shape.
The Bokoni mine in Limpopo is jointly operated by Amplats, a unit of Anglo American and Atlatsa Resources Corporation, a black empowerment platinum group metals producer. The mine was mothballed in 2017.
ARM told shareholders it was currently in discussions regarding the potential acquisition of Bokoni Platinum Mine, which if successfully concluded, might have a material effect on the price.
“There is no certainty that the transaction will be concluded. Accordingly, shareholders are advised to exercise caution when dealing in ARM’s securities until a further announcement is made,” said ARM.
Amplats confirmed that discussions are ongoing with ARM on the disposal of Bokoni Platinum Mine and said the terms of the proposed transaction are yet to be finalised.
“The Bokoni Platinum Mine was placed on care and maintenance in 2017 and the objective of the sale process is to identify an appropriate owner with operational, technical and financial capacity, to restart and operate the mine in a safe and sustainable basis, to support economic growth and job creation in the area and the broader Limpopo province,” Amplats said in a statement.
The odds were stacked against Bokoni which faced operational challenges, continued operational losses and negative cash generation, the depressed PGM environment, and the negative medium term PGM pricing outlook at the time. Adding to the mine’s woes was Atlatsa Group’s significant debt levels, and unsuccessful attempts to implement alternatives including the closure of shafts to return to profitability.
Over 2 651 Bokoni employees were retrenched as part of the suspension of the operations.
Commenting on the proposed transaction, Anchor Capital’s investment analyst Seleho Tsatsi said the discussions seemed to be quite far in progress already and the deal would significantly raise ARM's platinum group metals volumes.
“ The mine itself has gone through long periods of unprofitability, but would be cash generative at today's PGM basket prices,” said Tsatsi.
In 2015 the mine was also rocked by civil unrest when community members surrounding the mine blocked the main road leading to the operation with burning tyres and rocks preventing employees from reporting for work .
The Bokoni acquisition comes a day after Impala Platinum proposed plans for the acquisition of Royal Bafokeng Platinum’s (RBPlat) entire share capital. Implats said on Wednesday it and RBPlat were in talks, which could see Implats buying out investors in the smaller company.
BUSINESS REPORT ONLINE