Glencore CEO Ivan Glasenberg. Picture: BLOOMBERG
Glencore CEO Ivan Glasenberg. Picture: BLOOMBERG

Fresh from selling its mothballed Eland platinum mine to Northam Platinum, Glencore is in advanced talks with Anglo American Platinum to sell its stake in the Mototolo mining joint venture it shares with the world’s largest platinum miner for about R800m.

Glencore CEO Ivan Glasenberg has made it clear since the giant bulk commodities trader took over mining company Xstrata in 2013 that platinum was not a core asset for the company and that it would extricate itself from all of Xstrata’s platinum investments.

Sources say the talks between Amplats and Glencore are "very advanced" and close to conclusion, with a price tag on Glencore’s stake in Mototolo expected to reach R800m.

A sale would mark Glencore’s full exit from the platinum business it inherited, including an interest in Lonmin.

"We do not comment on speculation," said Glencore’s South African spokeswoman, Shamiela Letsoalo. Amplats spokeswoman Mpumi Sithole also declined to comment.

The Mototolo joint venture is equally held between Amplats and Glencore.

It is a relatively small mine operating on just 9km² on the edge of the undeveloped Der Brochen property owned  by Amplats in Limpopo north  of Steelpoort.

The mine produced 117,000oz of platinum for the joint venture in 2016 and generated net free cash flow of R286m. It is operated by Glencore, which sells its half of metal output to Amplats, which manages the concentrator.

Amplats has been clearing its portfolio of deep-level, labour-intensive, expensive mines to focus on shallower, mechanised, cheaper mines.

As part of its restructuring, Amplats has sold its large Rustenburg mining complex to Sibanye Gold, agreed to the sale of its Union mine to empowerment company Siyanda Resources and sold its stake in the Pandora joint venture to Lonmin.

Amplats is trying to extricate itself from its minority stake in the unprofitable and now suspended Bokoni joint venture with Atlatsa Resources.

In its joint-venture portfolio, Amplats described Mototolo — a safe underground mine that has gone without a fatal accident since 2011 — along with other joint ventures with Royal Bafokeng Platinum and African Rainbow Minerals as "the best assets" it wanted to retain.

Mototolo is a shallow, fully mechanised mine, extending to a depth of 450m below the surface via two decline shafts.

It has a concentrator that processes the relatively consistent ore its UG2 (upper group 2) reef produces.

With an investment needed for a new tailings dump, Glencore is likely to want to spend its money on its profitable ferrochrome business in SA rather than a noncore asset.

seccombea@bdfm.co.za

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