HomeNewsImpala to look at acquisitions

Impala to look at acquisitions

David Brown, CEO,
Impala Platinum
Johannesburg, South Africa — MININGREVIEW.COM — 29 August 2008 – Impala Platinum Holdings Limited – the world’s second-biggest producer of the metal – is assessing possible takeover targets to boost output, as slumping world financial markets reduce the cost of acquisitions.

“It’s the right time now to be looking at prospects,” CEO David Brown said in a speech in the city. “The value of some targets has fallen in recent months,” he added.

Bloomberg News quoted Brown as saying that acquisitions would add to growth in output, forecast at 2 to 5% this fiscal year, and cut costs as the power shortage in South Africa curbs Impala’s plans to develop its own mines. “Impala deferred a plan to produce 2.5 million ounces of the metal by 2012 to 2015 because of uncertainty over power supply Brown said. “Electricity cuts and safety stoppages lowered output 6% to 1.91 million ounces in the year ended June 30, and contributed to a 17 % increase in costs.”

“We still believe emphatically that medium-to-long-term fundamentals remain sound,” Brown said in an interview with Bloomberg. “Smaller mining companies are unlikely to see the plethora of supply that was expected six or seven months ago,” he added.

Brown went on to say that platinum would trade at similar or maybe slightly higher levels in the next 12 months, and at about $1 700 to $1 750 an ounce in five years. “Supply is still going to be somewhat of a concern from South Africa, as skills shortages, costs and lack of power aren’t going away, he said.

Impala sees a shortfall of 90 000 ounces of platinum this year and 295 000 ounces of palladium, while rhodium should move into a surplus of about 3 000 ounces, according to Impala marketing executive Derek Engelbrecht.

Brown declined to comment on a Daily Telegraph report earlier this week that Impala and Aquarius had considered buying Lonmin Plc, which is the subject of a US$9.8 billion hostile bid by Xstrata Plc. He also declined to comment on the Miningmx report that BHP Billiton Ltd. –  the world’s biggest mining company – may want to take over Impala.