Im­pala last plat­inum as­set for BHP Bil­li­ton

Finweek English Edition - - Openers - VIC DE KLERK

BHP BIL­LI­TON MAY soon have no choice but to make an of­fer of at least R200bn for Im­pala Plat­inum. BHP Bil­li­ton, the world’s largest pro­ducer of met­als and min­er­als as well as en­ergy, also has the world’s best and most di­ver­si­fied port­fo­lio of as­sets in the re­sources sec­tor – with the ex­cep­tion of plat­inum, to which it has no ex­po­sure. Nor does it own any re­serves.

Im­pala Plat­inum, the world’s sec­ond­largest plat­inum pro­ducer, has no con­trol­ling share­holder. If Xs­trata suc­ceeds in ac­quir­ing con­trol of Lon­min – which seems very likely – Im­pala will be the only avail­able re­main­ing plat­inum as­set world­wide.

The BHP Bil­li­ton of old, partly un­der the lead­er­ship of Brian Gil­bert­son, had no affin­ity for hard rock, deep-level min­ing. That’s why Gen­eral Min­ing, the fore­run­ner of the Bil­li­ton por­tion of BHP Bil­li­ton, con­sol­i­dated its plat­inum in­ter­ests in Im­pala and sold its gold mines (Buf­fels­fontein was its flag­ship). New CEO Mar­ius Klop­per, also a South African, is aware of that short­com­ing – the ab­sence of ex­po­sure to plat­inum – in BHP Bil­li­ton’s make-up.

Bil­li­ton is in the process of try­ing to take over Rio Tinto, the world’s sec­ond­largest min­ing group. Rio Tinto also has very lim­ited ex­po­sure to plat­inum.

A price of R200bn for Im­pala would be a pre­mium of around 42% above last week’s mar­ket value. That’s too lit­tle for such a valu­able as­set, es­pe­cially af­ter last week’s ex­cel­lent op­er­at­ing and fi­nan­cial re­sults for the year to 30 June 2008. Hope­fully, SA share­hold­ers will soon place a value of R250bn on this valu­able as­set. That means a price of about R400/share, as against the cur­rent R235. In­ci­den­tally, R400/share would only be around 10% more than Im­pala’s record share price of a few weeks ago.

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