African Rainbow Minerals (ARM) has agreed to acquire a 100% stake in Bokoni platinum mine (BPM) in South Africa from Bokoni Platinum, for $221m (ZAR3.5bn) in cash.
Located in the Eastern Limb of the Bushveld Complex in the Limpopo province, the Bokoni mine was put on care and maintenance in 2017, following several years of substantial cash losses due to difficult market conditions.
In 2019, an independent technical study was commissioned by Anglo American Platinum and Atlatsa Resources to assess options to restart the mine.
The study considered options including making capital investment into the mine to turn it into a more sustainable operation.
Based on the study outcome, the joint venture decided to sell their interests in the South African mine, to provide the required capital for restarting its operations.
Anglo American Platinum CEO Natascha Viljoen said: “In conjunction with our joint venture partner, Atlatsa, it was important that Bokoni Mine was sold to an operator with the technical and operational capability and access to funding to ensure the restart and sustainable future for the mine.
“The restart of the mine by ARM is expected to benefit employees, host communities, broader stakeholders and the regional economy, and allow employees and communities to participate in a new ownership structure.”
ARM has also created a new subsidiary, African Rainbow Minerals Platinum Proprietary Limited (ARM Platinum), which will be rebranded as ARM Bokoni Mining Consortium Proprietary Limited (ARM BMC).
This unit will own 85% of ARM BMC.
An employee share ownership plan special purpose vehicle (SPV), along with a local community SPV and a black industrialists SPV will own a stake of 5% each in the project.
African Rainbow Minerals executive chairman Patrice Motsepe said: “The acquisition and development of BPM will enable us to scale our platinum group metals (PGM) portfolio, improve ARM’s global competitiveness and allow us to pursue further value accretive organic growth.
“In addition to delivering competitive returns for shareholders, the development of BPM will allow ARM to create sustainable value for a broad range of stakeholders including local communities, employees and black industrialists who will together own 15% of the mine.
“As we build and operate BPM, we will create approximately 5,000 jobs of which 2,500 will be permanent.”
The deal, which is due for completion in 2022, is pending approvals from competition authorities.