Anglo Platinum Limited, based in South Africa, is the world’s leading primary producer of platinum, accounting for around 39% of global output. It mines, processes and refines the entire range of platinum group metals (PGMs): platinum, palladium, rhodium, ruthenium, iridium and osmium. Although PGMs are the primary products of its operations, base metals such as nickel, copper and cobalt sulphate are important secondary products and are significant contributors to earnings.
Anglo Platinum’s operations exploit the world’s richest reserve of PGMs, known as the Bushveld Complex, which contains PGM-bearing Merensky, UG2 and Platreef ores. The company has access to an excellent portfolio of ore reserves to ensure that it is well placed to be the world’s leading platinum producer for many years to come.
Anglo Platinum currently wholly owns five mining operations, a tailings re-treatment facility, three smelters, a base metals refinery and a precious metals refinery, all in the Limpopo and North West provinces of South Africa. Each of its mines operates its own concentrator facilities, with smelting and refining of the output being undertaken at Rustenburg Platinum Mines’ metallurgical facilities.
The company’s 100% owned mining operations comprise Rustenburg Platinum Mines’ Rustenburg, Amandelbult, Mogalakwena and Twickenham sections as well as Lebowa Platinum Mines, 51% of which is held for sale. Rustenburg Platinum Mines’ Union Section is 85% held, with a black economic empowerment (BEE) partner, the Bakgatla-Ba-Kgafela traditional community, holding the remainder.
Anglo Platinum also has a 50:50 joint venture with a BEE consortium, led by African Rainbow Minerals, over the Modikwa platinum mine, a joint venture with Royal Bafokeng Resources, a BEE partner, over the combined Bafokeng-Rasimone platinum mine and Styldrift properties and a joint venture with Xstrata over the Mototolo mine. In addition, Anglo Platinum has joint ventures with Aquarius Platinum covering the shallow reserves of the Kroondal and Marikana mines and portions of the reserves at Anglo Platinum’s Rustenburg Section.
In September 2007, Anglo Platinum agreed, in principle, to sell assets for a total upfront cash consideration of R7.6 billion (about $1.1 billion) to ‘historically disadvantaged South African’ (HDSA) companies, Anooraq Resources and Mvelaphanda Resources. The transactions envisaged the sale of an effective 51% of the Lebowa platinum mine and a further 1% of the Ga-Phasha, Boikgantsho and Kwanda 50:50 JV projects to Anooraq, as well as the sale of Anglo Platinum’s 50% interest in the Booysendal project and 22.4% shareholding in Northam Platinum Limited to Mvelaphanda.
In March and April 2008, the suite of definitive legal agreements for the transactions was entered into, which remained subject to various suspensive conditions. The sale of Anglo Platinum’s investment in Northam was finalised in December 2008 and the only remaining condition for the Booysendal sale is consent to transfer control from South Africa’s Department of Minerals and Energy, which is expected early in the first quarter of 2009.
In respect of the transaction with Anooraq, owing to the significant deterioration in global market conditions, material decline in PGM prices and constrained debt and equity capital markets, the Lebowa mine plan and project pipeline, including the Middelpunt Hill UG2 expansion project, are under review. Anglo Platinum and Anooraq intend to conclude the transaction as soon as is practically possible and have thus extended the date for fulfilment of the conditions until 30 April 2009.