By Chantelle Kotze

Platinum miner Anglo American Platinum (Amplats) on Wednesday announced the sale of its Rustenburg Operations to gold miner Sibanye Gold in a transaction worth R4.5 billion.

The Rustenburg Operations to be acquired by Sibanye include the Bathopele, Siphumelele and Thembelani mines as well as the integrated Khomani and Khuseleka mining operations, two concentrating plants, an on-site chrome recovery plant and the Western Limb Tailings Retreatment plant and associated surface infrastructure and related assets.

While the transaction perimeter includes mining, processing and surface infrastructure, excluded from the transaction is the smelting and refining operations as well as the Kroondal and Marikana pooling and sharing agreements with Aquarius Platinum.

An upfront payment of R1.5 billion in cash or shares will be paid by Sibanye, while a deferred payment of a minimum of R3 billion annually for a period of six years will also be payable from free cashflows.

Should the Rustenburg Operations generate negative free cashflows, Amplats will provide up to R267 million a year for three years until December 2018, and will also buy all concentrate produced at the Rustenburg Operations until then, after which a toll agreement to smelt and refine the produced concentrate will take over.

Speaking at the joint announcement Amplats CEO Chris Griffith said the disposal of the Rustenburg Operations to Sibanye was in line with the company’s restructuring plans aimed at prioritising its assets with the greatest long term value potential while divesting from assets which could secure a more sustainable future under different management.

Commenting on the transaction, Sibanye CEO Neal Froneman said the acquisition of the Rustenburg Operations is consistent with Sibanye’s strategy to grow its business and would ensure that it remained an industry leading dividend paying company.

“Having for some time indicated our interest in participating in the PGM sector, the acquisition of the large, high quality PGM resource provides us with the opportunity to leverage our operating model and hard rock, tabular, labour intensive mining competencies.”

Once the transaction has been consummated, Sibanye will become the fifth largest producer of platinum at an output of 800 000 ozpa of platinum group metals of which 500 000 ozpa will be of platinum.

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