HomeNewsMulti-million dollar platinum deal falls through

Multi-million dollar platinum deal falls through

Aerial view of the
Merensky and UG2
concentrator plants
at Northam mine
Johannesburg, South Africa — MININGREVIEW.COM — 15 January 2009 – Impala Platinum Holdings Limited (Implats) – second biggest platinum producer in the world –will not proceed with a R22 billion cash-and-shares deal to buy rivals Mvelaphanda Resources and its Northam Platinum unit, owing to the global economic climate.
In a joint statement the companies confirmed that Implats had terminated talks to buy the other two firms, sending Northam’s shares falling 26% and Mvelaphanda’s stock down 25% percent to R19.02 and R19 respectively. Implats shares traded 2.3% lower at R125.99.

“In essence the current market environment made it difficult for an agreement between the parties,” Implats CEO David Brown told Reuters in a telephone interview. Asked whether Implats would still be interested in the deal in future, he said this was a possibility.

“I think in essence it’s a possibility that we could look at assets ….we always look at assets. There has to be a change in the environment that allows both parties to get an agreement on value,” he added.

Reuters reports that, while launching the bid last September, Implats had said that it wanted to “create a South African-controlled platinum champion” which would have been a bigger rival to Anglo American Plc’s unit, Anglo Platinum – the world’s top producer of the metal.

The agency adds that the proposed deal would have given Implats access to Booysendal – Mvela’s prime platinum deposit, with a resource of 103.4 million oz of platinum-group metals and gold. Implats would also have obtained Northam’s profitable mine and smelting operations, that produced 292 989 ounces of metal in concentrates from its Northam mine in the last fiscal year.