Platinum miner Lonmin has signed a $200m metal purchase agreement with Pangaea Investments Management (PIM), an associate company of Jiangxi Copper Company (JCC).
This agreement will enable the platinum miner to improve its liquidity as it awaits the completion of Sibanye-Stillwater’s acquisition of the company.
According to Lonmin CEO Ben Magara, the new facilities still do not address “fundamental business challenges facing Lonmin and do not offer an opportunity to avoid the announced retrenchments and shaft closures.”
The miner has announced plans to axe 12,600 jobs due to the merger with Sibanye-Stillwater, which was agreed last December.
This all-share transaction received approval in September from the South African competition watchdog. However, the approval is dependent on the condition that Sibanye-Stillwater would enter into three short-term projects to avoid the loss of more than 3,000 jobs.
Lonmin stated that it was committed to the transaction, with the South African competition tribunal’s hearing set between 12 and 14 November.
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Lonmin secured this funding agreement with Pangaea based on its assets. This agreement also removes certain restrictions in its current debt facilities with regard to to closure of the Sibanye deal.
Sibanye Stillwater CEO Neal Froneman said: “We recognise Lonmin’s requirement to complete this financing transaction and we remain focused on completing the acquisition of Lonmin, and delivering on our strategy of creating value for all stakeholders.”
The new transaction is expected to conclude within the week.
Lonmin will also settle its pre-existing term loan of $150m and cancel its other pre-existing undrawn facilities with “both its South African Rand and US Dollar lender groups”.