Amplats completes exit from BRPM for R2.2bn
Anglo American Platinum continues its exit from noncore assets by finalising the sale of its remaining stake in the joint venture
Anglo American Platinum (Amplats) continued its exit from noncore assets by finalising the sale of its remaining stake in the Bafokeng Rasimone Platinum Mine (BRPM) joint venture for nearly R2.2bn.
Amplats was the partner in BRPM with Royal Bafokeng Platinum (RBPlat), which is buying its partner’s 33% stake in the joint venture.
Amplats has the right to buy half the concentrate coming from BRPM, which is one of two mines that RBPlat operates, the second being the new Styldrift mine, which is ramping up to steady state production.
The transaction was conducted by Amplats’ subsidiary Rustenburg Platinum Mines (RPM) and the concentrate purchase agreement will extend for the life of BRPM.
“The completion of the sale of RPM’s 33% interest in the BRPM joint venture allows Anglo American Platinum to further simplify its portfolio and focus its capital allocation into own-managed mines and projects,” said Amplats CEO Chris Griffith.
RBPlat will pay R1.86bn plus R315m towards repaying RPM’s contributions to the joint venture since the transaction was announced.
The concentrate purchase agreement is important for Amplats, which noted on Tuesday that its production profile would change from about 2.45-million platinum ounces in 2018 to between 2-million and 2.2-million ounces in the next three years.
This was because the concentrate it was buying from Sibanye-Stillwater would switch to a toll treatment agreement in 2019, whereby refined metal would be returned to the gold and platinum miner.
Amplats has been active in restructuring its assets, removing deep-level, labour-intensive mines from its portfolio to focus on shallow, mechanised operations.
Amplats has sold its mines at Rustenburg to Sibanye-Stillwater, while Union mine was sold to Siyanda Resources. It has, with its partner Atlatsa Resources, closed the Bokoni mine.
Atlatsa said on Wednesday it was taking the company off the Canadian and South African bourses because it was too expensive to maintain the listings and it was opting to be a private company.
Glencore sold its stake in the Mototolo mine and chrome plant to Amplats in a deal worth about R1.5bn earlier in 2018 as the world's largest platinum producer progressed its strategy to unlock the potential in its undeveloped Der Brochen property using the neighbouring Mototolo infrastructure to do so.
Mark Cutifani, CEO of Anglo American, which owns 80% of Amplats, said in an analyst call on Tuesday, the platinum miner could find a way to extract more palladium from its open pit Mogalakwena mine to take advantage of the soaring price of the metal, which has surpassed that of gold and platinum.
Palladium, which is in a huge deficit in the global market, is used primarily to make autocatalysts in petrol-fuelled vehicles.
Amplats noted on Tuesday its palladium output would fall by about 200,000oz a year to between 1.3-million oz and 1.4-million oz due to the toll-treatment arrangement with Sibanye.