Acquisition of Mototolo by Amplats complete
ANGLO American Platinum (Amplats) yesterday said it had completed the acquisition of Glencore’s Mototolo joint venture in Limpopo, paving the way for the company to access its neighbouring resource.
Amplats now owns 100 percent of Mototolo after buying a 40.2 percent stake in commodity trader Glencore and 9.8 percent in Kagiso Platinum Ventures. As the new majority owner of Mototolo, Amplats will extend underground workings into its De Brochen mine that were unavailable to the joint venture.
Amplats chief executive, Chris Griffith, said the acquisition of the Glencore and Kagiso interests in the Mototolo joint venture had resulted in the company becoming a wholly-owning a mechanised, low-cost, high-quality resource.
“The transaction unlocks significant optionality for the company in its adjacent wholly-owned Der Brochen resource, and will increase the life-of-mine to more than 30 years, creating material value for Anglo American Platinum,” Griffith said.
Amplats previously held about 50 percent in the asset and paid Glencore R900 million up front. A deferred consideration would be settled monthly over a six-year period and would be determined by the rand platinum group metals (PGM) prices over the Mototolo joint venture life of mine to 2024.
The company also paid Kagiso R267m, with no further deferred consideration being payable.
Mototolo is reportedly one of the highest-margin, safest mines in the Amplats stable, with a profit margin of 43 percent and produces of 130 000 ounces of platinum a year.
The mine had an all-in sustaining cost of $625 (R9 196) an ounce.
Amplats, the world’s biggest platinum producer, started dumping highcost conventional mines for mechanised low-cost ones as the subdued platinum price environment threatened the sustainability of the industry.
In 2013, Amplats announced a major shake-up of its portfolio that saw it reduce its mines to seven from 18, it also shed more than 10 000 jobs.
Last month Impala Platinum (Implats) said it would embark on a strategic restructuring of its operations as a result of the low platinum price environment.
The miner said the restructuring would see it selling or closing unprofitable mines in Rustenburg, North West.
Impala, the world’s second-biggest platinum producer also announced moves to cut 13 000 jobs in the next two years.
Lonmin, the world’s third biggest platinum producer said 12 000 jobs were at risk. Lonmin is being taken over by Sibanye-Stillwater.
Rene Hochreiter, a mining analyst at Johannesburg Noah Capital said Amplats’ acquisition of Mototolo was a good move.
Amplats shares rose 1.51 percent on the JSE yesterday to close at R489.21.