Implats to put $30m into new project

IMPALA Platinum (Implats) said yesterday that it would pay $30 million (R398m) for a 15 percent interest in a platinum project in the northern Waterberg region and had an option to acquire a majority stake in the development.

South Africa’s Chamber of Mines estimates that 65 percent of platinum operations in South Africa are losing money in the face of depressed prices and after years of soaring labour costs, but Implats said the resource has “an attractive risk profile given its shallow nature.”

“This facilitates fully mechanised production with the potential for the project to have among the lowest operating costs in the platinum group metals sector,” said Implats, the world No 2 platinum producer. Mechanised operations are far less labour intensive, reducing exposure to high wage bills and the bouts of labour unrest that have rocked the sector in South Africa.

The stake is being acquired from Platinum Group Metals Ltd and state-run Japan Oil, Gas and Metals National Corporation. Implats said it would now carry out a “definitive feasibility study” (DFS) of the project. Following DFS approval, it will then have 90 business days to decide whether or not to exercise its option to acquire majority control for $165 million (R2.18 billion).

Implats shares rose 2.11 percent to close at R32.45 on the JSE yesterday.