Northam looks to buy mines

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LonminMine Independent Newspapers. Picture: Boxer Ngwenya.

Johannesburg - Northam Platinum said it wants to snap up platinum assets in a shake-up of the country's mining sector, after posting a full-year loss due to a protracted strike at its main operations.

The mid-tier platinum producer said it would use its positive cash position and call on shareholders for funds to enable it to acquire assets.

“We do believe that we have good support from our institutional shareholders. If we have got the government right behind us - and we work shoulder to shoulder - we could be able to raise the money,” Northam chief executive Paul Dunne said at a results presentation on Thursday.

The company said it had reviewed its strategy in anticipation of opportunities arising in the sector.

“The process entails a thorough sifting of PGM (platinum group metals) opportunities in order to come up with a priority list of expansion,” the company said in a statement.

It said it would capitalise on “any restructuring in the sector”.

Anglo American Platinum (Amplats), the world's top platinum producer, said in July that it plans to sell a slate of mines in its drive to recover from a five-month strike and shift towards more mechanised mining.

The South African government has said that it would prefer a local buyer for the Amplats mines.

Sibanye Gold has emerged as the front runner in any race to acquire Amplats' or other platinum assets and Northam's entry into the field comes as a surprise given its size and its own challenges.

Northam said headline losses per share for the full year to the end of June were 2.2 cents, compared with earnings of 136.5 cents a year earlier.

Headline earnings per share is the key measure of profitability in South Africa and strips out certain one-off and non-trading items.

More than 7,000 members of the National Union of Mineworkers (NUM) downed tools at Northam's Zondereinde mine for 11 weeks demanding higher wages.

The strike ended just before the five-month strike by NUM's arch rival, the Association of Mineworkers and Construction Union (Amcu), at mines run by Amplats, Impala Platinum and Lonmin.

Northam said its new strategy would also focus on expansion at Zondereinde, ramping up production at its Booysendal mine and increasing its refining operations.

Its share price has gained 8 percent this year, outpaced by a 13.58 percent rise of Johannesburg's mining index.

Northam's shares were down 1.07 percent to 45.47 rand on Thursday. - Reuters

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