RBPlat, Implats rework Boschkoppie royalty deal
Royal Bafokeng Platinum (RBPlat) and Impala Platinum (Implats) have renegotiated the terms and conditions of a 2010 royalty agreement regarding the mining of Bafokeng Rasimone Platinum Mine joint venture’s (JV’s) Boschkoppie property.
According to the terms of the original agreement, which became effective in 2011, Implats was afforded the right to mine a demarcated southern portion of the Boschkoppie property from its No 6 and 8 shafts on the condition that it made a royalty payment to RBPlat of 15% of revenue earned.
Implats bore all the mining, safety, health and environmental risks associated with mining this area.
However, owing to the recent operational challenges at Implats’ Rustenburg operations and the rising costs at the No 6 and 8 shafts, in particular, RBPlat and Implats have agreed to substitute the royalty payment with a royalty payment linked to market conditions and, therefore, the profitability of Implats’ Rustenburg operations.
“In terms of the amended arrangement, Implats will pay the JV a royalty that is based upon a factor that is linked to Implats’ Rustenburg operations’ gross profit margin, with a minimum royalty payment of 5% of revenue earned and a maximum royalty payment of 25% of revenue earned, with effect from October 1,” RBPlat said.
The company believed that the amended agreement aligned the interests of the two businesses and was, therefore, beneficial for the shareholders of RBPlat.
The terms and conditions of the No 20 shaft royalty agreement with Implats remained unchanged at 17.5% of revenue.
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