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ANGLO AMERICAN PLC - Anglo American Platinum completes sale of Rustenburg Operations to Sibanye

Release Date: 01/11/2016 09:10
Code(s): AGL     PDF:  
Wrap Text
Anglo American Platinum completes sale of Rustenburg Operations to Sibanye

Anglo American plc
(Incorporated in England and Wales)
(Registration number: 3564138)
Registered office: 20 Carlton House Terrace, London, SW1Y 5AN
ISIN: GBOOB1XZS820
JSE Share Code: AGL
NSX Share Code: ANM

Anglo American Platinum completes sale of Rustenburg Operations to Sibanye

Anglo American plc draws attention to an announcement issued today by Anglo American
Platinum, the text of which is set out below:

Anglo American Platinum confirms the completion of the sale of the Rustenburg Operations by
its wholly owned subsidiary Rustenburg Platinum Mines to Sibanye Rustenburg Platinum Mines
Proprietary Limited (“Sibanye”) (the “Transaction”), and that Sibanye has now taken over
ownership, control and management of those operations.

The Rustenburg Operations comprise the Bathopele, Siphumelele (including Khomanani), and
Thembelani (including Khuseleka) mining operations, two concentrating plants, an on-site
chrome recovery plant, the Western Limb Tailings Retreatment Plant, associated surface
infrastructure and related assets and liabilities on a going concern basis, including normalised
levels of working capital.

Chris Griffith, CEO of Anglo American Platinum commented on the Transaction:

“This is a major step in the repositioning of Anglo American Platinum’s portfolio. The sale of the
Rustenburg Operations allows us to focus on our most competitive assets, consisting of largely
open-pit and more mechanised operations which will result in higher margin production, a
smaller and more highly skilled workforce, safer operations and a less complex organisation.
As a result, our core operations stand to benefit from dedicated management attention and
technical expertise, as well as our disciplined capital allocation model.”

Upfront disposal proceeds and use of proceeds

The upfront disposal proceeds of R1.5 billion (“Upfront Proceeds”) received in the form of cash
will reduce net debt and further strengthen Anglo American Platinum’s balance sheet.

Deferred proceeds

As set out in the announcement dated 9 September 2015, Sibanye will also pay minimum
deferred proceeds of R3.0 billion (in nominal terms), to be earned through a 35% share of the
distributable free cash flows generated by the Rustenburg Operations on an annual basis for a
period of six full years commencing from 1 January 2017.

To the extent that there is an outstanding minimum deferred proceeds balance at the end of the
six year period, Sibanye has the option to extend the payment period for up to two years (to 31
December 2024), or until the minimum deferred payment has been paid in full (whichever is
earlier). Sibanye has the option to settle the outstanding balance in cash or listed Sibanye Gold
Limited ordinary shares at the end of the six or eight year period.

Adjustments to the purchase consideration

After the closing of the Transaction on 1 November 2016, if the distributable free cash flow
generated by the Rustenburg Operations is negative in 2016, 2017 or 2018, there will be a
downwards adjustment to the Upfront Proceeds received up to R267 million per annum, or a
lesser amount required to reduce any negative distributable free cash flow to zero.

In 2016, the maximum amount payable is R44.5 million, pro-rated from 1 November 2016 as
the closing date of the Transaction. In 2017 and 2018, the maximum payable amount is R267
million per annum, plus any difference between the amounts actually paid and the maximum
payable amount in the previous periods. In total the maximum adjustment to the purchase
consideration is R578.5 million (in nominal terms), if the distributable free cash flow generated
by the Rustenburg Operations is negative in 2016, 2017 or 2018.

Sale and toll treatment of concentrate agreement

Anglo American Platinum has entered into a sale and toll treatment of concentrate agreement
with Sibanye.

Sibanye will sell all concentrate produced by the Rustenburg Operations to Anglo American
Platinum until 31 December 2018 based on pre-agreed commercial terms.

Thereafter, for a period of up to eight years (and no less than two years) starting 1 January
2019, Sibanye will enter into a toll treatment arrangement where Anglo American Platinum will
undertake the smelting and refining activities in respect of the Rustenburg Operations on pre-
agreed commercial terms. The charge payable by Sibanye under the toll treatment
arrangement will reflect smelting and refining costs as well as economic return on the
proportional share of the current capital base that Anglo American Platinum has invested in its
processing assets.

Financial effects of the Transaction

On 1 November 2016 the net assets of the Rustenburg Operations will be derecognised from
Anglo American Platinum’s balance sheet. After taking into account the estimated value of the
upfront proceeds, deferred disposal proceeds, adjustment to purchase consideration and
transaction costs, an accounting loss on disposal of the Rustenburg operations of an estimated
R1.5 billion will be recognised (conditional on final financials for October), which will impact
basic earnings in the year ended 31 December 2016.

For further information, please contact:

Media                                                     Investors
UK                                                        UK
James Wyatt-Tilby                                         Paul Galloway
james.wyatt-tilby@angloamerican.com                       paul.galloway@angloamerican.com
Tel: +44 (0)20 7968 8759                                  Tel: +44 (0)20 7968 8718

Marcelo Esquivel                                          Trevor Dyer
marcelo.esquivel@angloamerican.com                        trevor.dyer@angloamerican.com
Tel: +44 (0)20 7968 8891                                  Tel: +44 (0)20 7968 8992

South Africa                                              Sheena Jethwa
Pranill Ramchander                                        sheena.jethwa@angloamerican.com
pranill.ramchander@angloamerican.com                      Tel: +44 (0)20 7968 8680
Tel: +27 (0)11 638 2592

Ann Farndell
ann.farndell@angloamerican.com
Tel: +27 (0)11 638 2786
Notes to editors:

Anglo American Platinum Limited is a member of the Anglo American plc Group and is the
world’s leading primary producer of platinum group metals. The company is listed on the
Johannesburg Securities Exchange (JSE). Its mining, smelting and refining operations are
based in South Africa. Elsewhere in the world, the Group owns Unki Platinum Mine in
Zimbabwe. Anglo American Platinum has a number of joint ventures with several historically
disadvantaged South African consortia as part of its commitment to the transformation of the
mining industry. Anglo American Platinum is committed to the highest standards of safety and
continues to make a meaningful and sustainable difference in the development of the
communities around its operations.

www.angloamericanplatinum.com

Anglo American is a globally diversified mining business. Our portfolio of world-class
competitive mining operations and undeveloped resources provides the raw materials to meet
the growing consumer-driven demands of the world’s developed and maturing economies. Our
people are at the heart of our business. It is our people who use the latest technologies to find
new resources, plan and build our mines and who mine, process and move and market our
products – from diamonds (through De Beers) to platinum and other precious metals and
copper – to our customers around the world.

As a responsible miner, we are the custodians of those precious resources. We work together
with our key partners and stakeholders to unlock the long-term value that those resources
represent for our shareholders, but also for the communities and countries in which we operate
– creating sustainable value and making a real difference.

www.angloamerican.com


1 November 2016
 
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
 

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