Plant works for Wonderkop platinum mine, operated by Lonmin. Picture: BLOOMBERG/ DEAN HUTTON
Plant works for Wonderkop platinum mine, operated by Lonmin. Picture: BLOOMBERG/ DEAN HUTTON

The last requirement for Lonmin to buy out the partners in its Pandora project, agreement from banks, has been achieved, the platinum miner announced on Friday morning.

Lonmin announced in November 2016 Anglo American Platinum had agreed to sell its 42.5% stake in Pandora for R400m cash and a share of profit for six years.

In May, it announced Northam had agreed to sell its 7.5% share of Pandora for R46m, taking Lonmin’s stake in the project to 100%.

These transactions were subject to a number of conditions, all of which had now been fulfilled, Lonmin said on Friday.

In May, the deal was given Competition Tribunal approval and in August the Department of Mineral Resources gave its approval.

"The completion of the Pandora transaction unlocks significant synergies. It allows Lonmin to extend mining at its Saffy shaft without having to spend R2.6bn of capital expenditure, of which R1.6bn would have been required over the next four years.

"Lonmin expects to complete the acquisition before the announcement of its full-year results in November 2017, having met all the remaining administrative conditions precedent," the statement said.

The group said it expected to report sales for its financial year to end-September would be "slightly above guidance", while its unit costs and capital expenditure would remain as forecast.

As a joint venture, Pandora was loss-making, but Lonmin could make the mine profitable because the terms governing the sale of its ore to Lonmin for processing would fall away.

Please sign in or register to comment.