Northam gears up to buy platinum assets
Northam Platinum, one of South Africa’s smaller mining groups, is getting ready to buy up some assets that may be for sale by bigger companies.
The company this week announced it would “look towards capitalising on any restructuring in the sector” after Anglo American Platinum announced it would sell its Rustenburg platinum mines.
But according to Northam, the platinum industry would be truly reinvigorated only four years from now, in 2018.
That is when the platinum market is expected to “turn” into favourable territory with significantly higher prices.
The fact that platinum prices barely moved during this year’s platinum strike has confirmed that above-ground stocks are readily available and are keeping the price down, Northam said in its annual financial report this week.
The company needed to get “strategically fit” before then, which included sorting out its empowerment status and seeking mines it could buy when bigger companies started selling, it said.
Impala Platinum warned on Friday that the five-month-long platinum strike by the Association of Mining and Construction Union had knocked its headline earnings down by 70% to 75% to as little as 82c a share in the year to June.
That translates to headline earnings of about R500 million as opposed to R2 billion the previous financial year.
Northam suffered a separate 11-week-long strike by the National Union of Mineworkers at the end of last year.
Its headline earnings for the same period had fallen by 98.4%, from R522 million to R8.6 million. – Dewald van Rensburg