Amplats gets $385 million offer for Bokoni mine stake

December 17
10:11 PM 2014

Anglo American Platinum has received a 4.5 billion rand ($385 million) offer for its 49 percent stake in the Bokoni mine in northeast South Africa, a source said on Wednesday, pushing its shares higher.

South African platinum mining houses are on a restructuring drive that includes selling off under-performing and labor-intensive shafts following a five-month strike this year that dashed hopes of making them profitable.

Amplats' stake in the Bokoni mine and other shafts around Rustenburg, the epicenter of the strike, has been up for sale as part of its drive to switch to more mechanized mining. The world's top platinum producer is a unit of global miner Anglo American.

Baroka Tribal Mining, a community-owned firm in Limpopo province, will also buy Amplats' 22.5 percent indirect stake in its joint venture partner, Atlatsa Resources, according to a document seen by Reuters.

The rest of Bokoni - a four-shaft mine that produces 170,000 ounces of platinum group metals a year - is owned by Toronto-based Atlatsa.

The Amplats stake in Atlatsa is worth about $48 million, according to Reuters data.

"Baroka will also be taking on 1.7 billion rand in debt that Amplats loaned to Atlatsa as part of the deal," the source, who spoke on condition of anonymity, told Reuters.

A spokesman for Baroka was not immediately available to comment. Amplats declined to comment, saying all queries should be directed to Atlatsa.

"We are a 51 percent shareholder in Bokoni, so we can't comment on Amplats' stake in the JV or in the company," said Prudence Lebina, head of investor relations at Atlatsa.

Shares in Amplats jumped as much as 4.8 percent after the news, and were up 3.4 percent at 324.35 rand when the Johannesburg bourse closed at 1000 ET.

"It seems like a good deal for Amplats because it would give them some cash to invest in more profitable mines plus it helps them get rid of a troubled mine," said Michael Homem, an equity analyst at Kaizen Asset Management.

The document, dated Dec. 18, said Baroka had the support of South Africa's state-owned pension fund, the Public Investment Corporation (PIC), in its bid for the mine.

The source said the PIC was set to fund part of the transaction in exchange for a stake in the mine. Some of the funding would come in the form of a loan from local lender Nedbank, the source added.

The PIC and Nedbank did not respond to phone calls for comment.

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