JOHANNESBURG (miningweekly.com) – JSE-listed Anglo American Platinum’s (Amplats’) subsidiary Rustenburg Platinum Mines has acquired diversified miner Glencore’s 39% stake in the companies’ joint venture (JV) Mototolo project, on the eastern limb of the Bushveld Complex, in Limpopo, for R1.5-billion.

This solidifies Amplats’ ownership of the project at 89%, with the remaining 11% held by Kagiso Tiso Holdings, which had the option to retain its interest in the project or dispose of the 11% for a further payment of R350-million by Amplats.

The increased shareholding in a mechanised, low-cost, high-quality resource creates another platinum group metals (PGMs) hub for Amplats, especially since it unlocks the opportunity to explore the Der Brochen resource adjacent to and downdip from Mototolo.

By combining Mototolo and Der Brochen, the company can extend the current remaining mine life of five years to more than 30 years.

The effective date of the transaction is expected to be in the fourth quarter of this year.

Meanwhile, Amplats has declared an interim dividend of R3.74 for the six months ended June 30, since headline earnings increased to R3.4-billion compared with R700-million reported in the first half of 2017, owing to the company’s improved operational performance and an improvement in the rand basket price for the period.

Earnings before interest, taxes, depreciation and amortisation grew 70% year-on-year to R6.8-billion for the period (increasing the margin to 21%), following a 4% year-on-year increase in PGM production as a result of a record performance at the Mogalakwena and Unki mines, as well as a turnaround plan at Amandelbult to further mechanise the mine.

Amplats has sold its 33% interest in the Bafokeng Rasimone Platinum mine to Royal Bafokeng Platinum, and reduced its equity ownership in Royal Bafokeng Platinum from 11.4% to 2.6%, with a view to exit the company.

Amplats also sold its 85%-owned Union mine to Siyanda Resources.

The acquisitions and sales form part of Amplats’ strategy to simplify its portfolio and focus its investment on low-cost, high-quality assets.

Amplats CEO Chris Griffith commented on Monday that the portfolio is now positioned with 70% of production in the first half of the cost curve, outperforming input cost inflation, improved operating free cash flows and delivering a return on capital employed of 22.4%.

“The balance sheet has been de-leveraged with net debt reducing from R14.8-billion in 2014, to a net cash position of R500-million in the first half of 2018, and we are paying an interim cash dividend of R1-billion.

“Our focus remains on driving the value and earnings of the business by taking the performance of the operations to world best practice, investing in growth optionality across the portfolio and developing the market for PGMs. We will continue to seek to deliver these strategic priorities in a safe, value-driven and socially responsible way.”