Impala Platinum Holdings (Implats) subsidiaries Impala Platinum and Impala Refining Services (IRS) have entered into a sale of business agreement for Impala to acquire the metal purchase and toll refining operations of IRS for R8-billion.

IRS is now a division of Impala, rather than a standalone operation.

Implats holds 96% of the shares in Impala, which conducts mining operations, operates a smelting plant near Phokeng, North West, and operates a refinery for base and precious metals in Springs, Gauteng.

IRS does not own or operate any processing and/or refining assets, but has agreements in place with Impala to process material acquired by IRS under contract through Impala’s processing and refining facilities.

IRS initially held a beneficiation licence in terms of the Precious Metals Act (PMA), which governs the acquisition, possession, smelting, refining, beneficiation, use and disposal of precious metals in South Africa.

It also held an import permit to procure unwrought precious metals from international customers.

During 2007, IRS engaged extensively with the then Department of Minerals and Energy to obtain an understanding of the licences for which IRS should apply in terms of the PMA, as it does not own or operate any precious metal mining, processing or refining assets.

It was agreed with the Regulator that IRS should obtain a precious metals beneficiation licence for its toll contracting business.

However, the Department of Mineral Resources in 2016 informed IRS that it would need to replace its precious metals beneficiation licence with a precious metals refining licence.

The requirements for the submission and approval of a precious metals refining licence application include compliance with the Mining Charter.

IRS unsuccessfully applied for a precious metals refining licence in December 2016 under the prevailing operating model where IRS used Impala’s facilities, which operates with a fully compliant precious metals refining licence.

Following extensive consultation, it was agreed that the most efficient manner in which IRS could commercially meet the requirements to obtain a precious metals refining licence, given its unique operating model, was to become a fully integrated division of Impala, which already processes all the material acquired by IRS and conducts most of the regulatory and administrative duties required in terms of the PMA.

Not securing the required regulatory approvals would preclude IRS from continuing to conduct its business, as it would not be able to secure the necessary permits to buy material containing precious metals from its customers.

The benefits of IRS becoming a division of Impala also include simplifying the corporate structure and ongoing toll refining business model by combining

IRS’s contract administration function and the processing/refining function through

Impala’s facilities under the same corporate entity (Impala).