Northam sets target to overtake Lonmin
NORTHAM Platinum has ambitious plans to leapfrog Lonmin into third spot in the league of top global platinum miners, writes Allan Seccombe.
It said it had an “aspirational target” of 1-million ounces by 2020, with growth coming from expanding output at Booysendal and Zondereinde.
It was also considering acquisitions or joint ventures. It could be interested in the southern portions of Anglo American Platinum’s Der Brochen mine adjoining Booysendal, if the firm wanted to dispose of them.
But Northam first wanted to resolve its Mining Charter shortfalls to avoid any constraints in its growth plans, CEO Paul Dunne said yesterday. It must meet a 26% black economic empowerment target set by the charter for the end of this year. It also had to sort out a housing shortfall near its Zondereinde mine, which could take until 2017.
An empowerment deal was imminent, Mr Dunne said.
The previous empowerment deal collapsed in 2012 when Tokyo Sexwale’s Mvelaphanda Resources, holder of an 11.5% stake, and Lazarus Zim’s Afripalm Resources, owner of 10.6%, sold their stakes “to address current breaches of covenants contained in the black economic empowerment financing agreements”, Northam said.
NORTHAM Platinum wants to more than double production, leapfrogging Lonmin into third spot in the league of top global platinum miners.
Northam, which operates the mature Zondereinde mine, will ramp up its new Booysendal to full production by October next year, giving it total annual production of 460,000 ounces of platinum group metals.
It has set itself an “aspirational target” of 1-million ounces by 2020, with growth coming from expanding output at the two mines, looking at options around its large resource base at Booysendal as well as considering acquisitions or joint ventures.
Northam wanted first to resolve its Mining Charter shortfalls to avoid any constraints in its growth plans, said Paul Dunne, the former Impala Platinum executive who took over as CEO of Northam from Glyn Lewis.
One of the prospects for growth comes from the southern part of the Booysendal property, which Aquarius Platinum had wanted to buy and incorporate into its neighbouring Everest mine and processing operation.
Aquarius CEO Jean Nel said recently that the mothballed Everest mine could be restarted if the platinum price was higher, and it had started talks with neighbours to explore options to extend the life and size of Everest.
“We’ve had a cup of tea,” Mr Dunne said when asked whether an Aquarius deal could be revived.
Northam could also be interested in the southern portions of Anglo American Platinum’s (Amplats’s) Der Brochen mine adjoining Booysendal if the firm, which is selling its Rustenburg and Union mines and Pandora joint venture, wanted to dispose of parts of the property.
Northam is unlikely to want Union, being an older, labourintensive asset where Amplats has had recurring labour unrest.
Northam must meet a 26% black economic empowerment (BEE) target set by the charter for the end of this year. It must sort out a housing shortfall near its Zondereinde mine, which could take until 2017, Mr Dunne said.
The empowerment deal was imminent, he said.
The previous empowerment deal collapsed in 2012 when Tokyo Sexwale’s Mvelaphanda Resources, holder of an 11.5% stake, and Lazarus Zim’s Afripalm Resources, owner of a 10.6% stake, sold their stakes “to address current breaches of covenants contained in the BEE financing agreements”, Northam said.
The Department of Mineral Resources had told the company to “urgently restore” its empowerment levels, it said.
“It’s important we design the empowerment transaction for success. It’s quite innovative. In fact, I’d use the words ‘landmark transaction’,” Mr Dunne said.
Northam is aware it needs to secure shareholders’ approval for the transaction, given that there is a degree of unhappiness that there could be dilution of their stakes because of the failure of the earlier empowerment deal.