Lonmin deal could be a game-changer
The Competition Commission in mid-September recommended that Sibanye-Stillwater’s plan to buy out the troubled Lonmin (for just over $380m) be approved (with certain conditions).
Sibanye-Stillwater is currently the largest individual producer of gold from South Africa and is also one of the 10 largest gold producers globally.
Should the Competition Tribunal approve the Lonmin transaction, it would create the world’s number-two platinum producer, and one of the world’s biggest sources of platinum group metals (PGMs).
Key assets in the Lonmin takeover are its concentrators, smelters and refineries.
Neal Froneman, pointed out that following the proposed transaction, the company would be “a leading mine-tomarket producer of PGMs in South Africa”. Over the past couple of years, Sibanye-Stillwater also acquired Aquarius Platinum, as well as Anglo Platinum’s Rustenburg operations.
Sibanye-Stillwater, with operations in Southern Africa and in the US, came under pressure this year for the amount of fatal accidents at its mining operations in South Africa. By July, 20 deaths had been reported at its mines.
How to trade it:
Sibanye-Stillwater is trading in its longterm bear trend. Retaining support at 660c/share has triggered a recovery within the trend. However, it recently encountered resistance at 975c/share and has pulled back. If support holds above 745c/share, prepare to go long above 975c/share. The upside target would be at 1 180c/share and then at 1 315c/share. Alternatively, Sibanye-Stillwater would retest its prior low at 660c/share on continued selling through 745c/share. ■ email@example.com
Neal Froneman CEO of Sibanye-Stillwater