Ayanda Mdluli
JOHANNESBURG- Anglo American Platinum said earlier on Friday that it had completed the sale of its 85% interest in Union Mine and its 50.1% interest in MASA Chrome to Siyanda Resources Proprietary Limited for R 400 million in cash.
In an announcement, the company said the effective date of completion will be 1 February 2018, when Siyanda will take over ownership, control and management of the operations.
According to the company, the R400 million will be used to reduce the company’s net debt and further strengthen Anglo American Platinum’s balance sheet.
“In addition, a deferred consideration based on 35% of cumulative positive distributable free cash flow will be paid annually as an earn-out for a period of ten years from the effective date of the Transaction,” said the company in an announcement.
Chris Griffith, the CEO of Anglo American Platinum explained that the maximum cap on the deferred consideration is R6 billion.
“Anglo American Platinum has no obligation to contribute towards any negative cash flow that may be generated by the assets post the disposal.”
“Siyanda will sell concentrate produced by Union Mine to Anglo American Platinum for a period of seven years from the effective date of the Transaction where after Anglo American Platinum will toll treat concentrate for the remaining life of Union Mine, both on pre-agreed commercial terms,” he said.
Griffith further explained:
“In addition to the sales of Pandora and Rustenburg, with the completion of Union, Anglo American Platinum has executed a core part of its strategy of repositioning the portfolio. This Transaction will allow us to focus on our most competitive assets, which are largely open-pit and mechanised operations which will result in higher margin production, a smaller and more highly skilled workforce, safer operations and a less complex organisation. Our core operations will benefit from dedicated management attention, technical expertise as well as enabling us to focus our capital allocation.”
Lindani Mthwa, Group Chairman of Siyanda Resources commented on the transaction:
“The Union Mine and Masa Chrome operations are quality assets which have long-term potential under Siyanda’s ownership and management. Siyanda’s management team has extensive mining experience including experience at Union Mine. This Transaction is mutually beneficial for all parties involved and, through our partnership with the Bakgatla-Ba-Kgafela and our employees, we believe that we will create a sustainable future for the operation,” he said.
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