Johannesburg - South Africa's biggest gold producer, Sibanye Gold, was on track with its expansion into the platinum industry despite the dramatic slide in precious metal prices, the company said yesterday.
Earlier this year, Sibanye snapped up Aquarius Platinum and Anglo American Platinum’s struggling Rustenburg operations this year as platinum prices fell to record lows.
Committed
Neal Froneman, Sibanye’s chief executive, said in a statement that despite platinum group metal (PGM) prices drifting lower since the transactions were announced, Sibanye remained committed to expeditiously concluding both transactions, which are each compelling in their own right.
Yesterday, the spot platinum price fell to $826 (R11 885) an ounce, which was the metal’s lowest level since late 2008.
The platinum price was last quoted at $830.70 an ounce.
Sibanye’s share price yesterday fell 0.42 percent to R18.92.
Sibanye has become a leading gold producer after being established in 2013 when Gold Fields unbundled its ageing South African assets, Beatrix, Driefontein and Kloof mines.
“Combining the contiguous Rustenburg operations with Aquarius’ Kroondal mine will enable us to deliver significant operational synergies, underpinning a sustainable business in a lower-for-longer price environment and providing leverage to a recovery in prices, thereby enhancing value for shareholders,” Froneman said.
Sibanye agreed to buy Aquarius for R4 billion, a month after agreeing to acquire assets from the world’s largest platinum producer for at least R4.5bn.
This as the platinum price has been in free fall, resulting in mining houses announcing measures to keep afloat including cutting back on production has led to thousands of job losses.
Aquarius owns the Kroondal mine in the North West and it also owns a stake in the Mimosa venture in Zimbabwe with Impala Platinum.
Competition commission approval for the Kroondal deal was expected by the end of March.
Timelines
Competition commission timelines dictate that ruling on a merger be made within 60 business days, unless an extension is requested by the commission.
All other conditions related to regulatory and third party consents required for the Aquarius transaction had been obtained to the extent required, Sibanye said.
The Rustenburg deal was being finalised, with Sibanye shareholders expected to meet in mid-January next year.
Anglo American Platinum was planning to either sell or list the Rustenburg mines separately after being hit by the low commodity prices.
The company was awaiting approval from the competition commission for the Anglo American Platinum deal and gave similar time guidelines to the Aquarius transaction.
BUSINESS REPORT