Lonmin CEO Ben Magara
Photo by: Duane Daws
JOHANNESBURG (miningweekly.com) – Platinum mining company Anglo American Platinum (Amplats) on Friday announced the sale of its 42.5% interest in the Pandora Joint Venture (JV) to platinum company Lonmin in a deferred six-year cash transaction linked to a concentrator rental agreement.
The transaction increases Lonmin’s ownership of the Pandora JV to 92.5% and allows Amplats to rent its Baobab concentrator in Limpopo for a minimum of R46-million a year.
Lonmin’s purchasing vehicle is its wholly owned Eastern Platinum, which will pay Amplats at least R400-million cash and a maximum of R1-billion over six years.
The Pandora JV is currently held 50% by Eastern Platinum, 42.5% by Amplats through Rustenburg Platinum and 7.5% by Northam through Mvelaphanda Resources.
“This is an excellent strategic fit for Lonmin,” said Lonmin CEO Ben Magara.
“The benefits of operational control over Baobab will enable us to unlock further value at Mogalakwena mine and achieve cost savings,” said Amplats CEO Chris Griffith in a release to Creamer Media’s Mining Weekly Online.
Amplats’ rationale for the transaction is based on the repositioning of its portfolio to focus on its most competitive opencast, mechanised assets, while Lonmin gets to consolidate its position in Pandora’s relatively shallow and high-grade mineral resource and provide an option for development by Eastern Platinum in both the short and longer term.
The Pandora JV area is contiguous with Lonmin’s Eastern Platinum and relies on Eastern Platinum-operated mining and processing infrastructure.
The Pandora JV contributed 37 553 platinum ounces from 74 019 platinum group metal ounces to Lonmin in the 2015 financial year.
Amplats will receive the deferred cash calculated yearly as 20% of the distributable free cash flows generated by Pandora for six years.
This deferred cash of not less than R400-million and not more than R1-billion is based on the Pandora E3 operations cash flows on a mine-to-ore basis.
Lonmin will allow Amplats three years of full operational control of the Baobab concentrator, which last year contributed 23 500 oz of platinum metal in concentrate.