London, England — 30 March 2012 – A consortium led by South Africa-listed Pallinghurst Resources Limited has announced the creation of a new South African platinum operation that is set to become a top-four global producer in four to five years.

Fox Business reports that Pallinghurst “’ a global natural resources investment consortium “’ has agreed with the Bakgatla Ba Kgafela tribe in the northwest province of South Africa and independent, mid-tier platinum producer Platmin Limited to merge their platinum group of metal assets in the region to form a new company whose name has yet to be disclosed.

“The new company will have a PGM resource base of 70Moz and a mine life of more than 30 years,” the partners said in a statement released here. It would also be debt-free with a US$500 million cash position, thanks to a cash injection from South African state investment agency the Industrial Development Corporation (IDC).

The IDC has agreed to purchase a 16.2% stake in the new company for US$420 million plus warrants equal to another 4% stake in the company. The partners said that the IDC’s investment values the new company at about US$3 billion.

“This strategic partnership between the IDC and Pallinghurst will certainly transform the local platinum mining and beneficiation landscape,” said IDC chief executive Geoffrey Qhena, noting that IDC’s equity funding is the catalyst to implement the consolidation plan which has been five years in the making.

The new company will operate a mega-mine created from the merger of three existing shallow PGM mines that are situated on the western limb of the Bushveld complex, just south of Anglo Platinum Limited’s Union mine. Anglo Platinum, a unit of Anglo American plc,  is the world’s largest platinum producer, accounting for some 40% of global production.

The new company’s resource base includes 12km of shallow-dipping strike length, most of which is mineable through open-cast and inclines that allow for safe and cost-efficient mining.

Whereas new platinum projects tend to reach depths of 2,000m, most of the new company’s resource base is shallower than 600m, resulting in a safer mining environment and lower expenses associated with electricity intensive ventilation and refrigeration needed for deep, underground mining.

The statement adds that Pallinghurst and its partners will also create a joint venture with the IDC to explore, and ultimately fund, opportunities in PGM beneficiation and processing.

The partners expect the transactions to be completed during the second quarter of this year and plan to provide a memorandum that will be sent to Platmin’s shareholders in the near future.

Source: Fox Business. For further details click here.