Wrap Text
Anglo American Plat announces sale of its interests in Union Mine Joint Venture & MASA Chrome to Siyanda Resources
ANGLO AMERICAN PLATINUM LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1946/022452/06)
Share Code: AMS
ISIN: ZAE000013181
("Anglo American Platinum" or “the Company")
Anglo American Platinum announces the sale of its interests in the Union Mine Joint Venture
and MASA Chrome to Siyanda Resources
Introduction
Anglo American Platinum announces that Rustenburg Platinum Mines Limited (“RPM”), a wholly
owned subsidiary of the Company, has entered into a Sale and Purchase Agreement (“SPA”) to sell
its 85% interest in Union Mine and its 50.1% interest in MASA Chrome Company Proprietary Limited
(“MASA Chrome”) (together, the “Disposal Assets”) to a subsidiary of Siyanda Resources Proprietary
Limited (“Siyanda”) (“the Transaction”). Anglo American Platinum will retain the Mortimer smelter
operation.
Description of the Disposal Assets
Union Mine and MASA Chrome are located in both the Limpopo and North West provinces of South
Africa and Union Mine operates under a mining right covering an area of 119 square kilometres.
Disposal Consideration
Under the terms of the SPA, the Transaction consideration comprises an initial disposal consideration
of R400 million, payable in cash, as well as a deferred consideration based on 35% of cumulative
positive distributable free cash flow paid annually as an earn-out, for a period of ten years from the
effective date of the Transaction, which deferred consideration has a cap of R6 billion. The maximum
Transaction consideration receivable by the Company is therefore R6.4 billion. Anglo American
Platinum has no obligation to contribute towards any negative cash flow that may be generated by the
Disposal Assets. Anglo American Platinum intends to use the Transaction consideration proceeds to
reduce debt.
Chris Griffith, CEO of Anglo American Platinum, commented on the Transaction:
“We are pleased to deliver another important milestone in the strategic repositioning of Anglo
American Platinum’s portfolio. The Union Mine and Masa Chrome operations are quality assets that I
believe have long-term and sustainable potential under Siyanda’s ownership. This Transaction is
beneficial for both parties, whilst also creating a sustainable future for the operation.”
Purchase and Toll Treatment of Concentrate
Siyanda will sell concentrate produced by the Union Mine to Anglo American Platinum for a period of
seven years from the effective date of the Transaction on pre-agreed commercial terms and thereafter
Anglo American Platinum will toll treat concentrate for the remaining life of Union Mine. The charge
payable by Siyanda under the toll treatment arrangement will reflect smelting and refining costs as
well as an economic return on the proportional share of the capital base that Anglo American
Platinum has invested in its processing assets.
Conditions precedent and effective date
The Transaction is subject to the fulfilment or waiver (where capable of waiver) of the following
conditions precedent by no later than the long-stop date of 30 June 2018:
- the granting of the Section 11 consent from the Department of Mineral Resources (DMR);
- the approval of the Transaction by the competition authorities of the Republic of South Africa;
- the conclusion of Siyanda’s BEE structure; and,
- the conclusion of various ancillary agreements required for implementation of the
Transaction.
The Transaction is expected to complete during the second half of 2017.
Rationale for the Transaction
In January 2013, Anglo American Platinum announced its intention to reconfigure, and thereafter exit
the Disposal Assets. Since then, significant restructuring has been delivered at Union, including
combining North and South Mines into a single operation and placing North declines, South declines
and the Mortimer Merensky concentrator on care and maintenance. Operational improvements have
also had a significantly positive effect on Union Mine’s cost position and cash generation. The
Company, however, has more value accretive capital options in its portfolio and would not prioritise
capital investment into the Disposal Assets, and is therefore not the best owner of these assets.
The sale of Union Mine and MASA Chrome advances the Company’s repositioning to focus on its
most competitive assets, consisting of largely open pit and mechanised operations which will deliver
higher margin production, a more highly skilled workforce, safer operations and a less complex
organisation.
Value of the net assets and profits attributable to the net assets
As at the Company’s year ended 31 December 2016, the value of the net assets pertaining to the
Disposal Assets was R1,654 million. The profits attributable to the Disposal Assets is not separately
disclosed recognising the nature of the Company’s smelting and refining activities.
Categorisation of the Transaction
The Transaction constitutes a Category 2 disposal for the Company and, as such, no shareholder
approval is required.
Johannesburg, South Africa
15 February 2017
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
For further information, please contact:
Investors: Media:
Emma Chapman Mpumi Sithole
(SA) +27 (0) 11 373 6239 (SA) +27 (0) 11 373 6246
emma.chapman@angloamerican.com mpumi.sithole@angloamerican.com
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
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