JOHANNESBURG - Anglo American Platinum said on Monday its wholly-owned subsidiary Rustenburg Platinum Mines had signed a sale and purchase agreement with major commodity producer and marketer Glencore to purchase its 39 percent interest in the Mototolo joint venture.
It said the consideration for the transaction comprised an upfront cash payment estimated at R800 million on a cash free basis while an additional consideration estimated at around R1 billion at current spot prices would be settled monthly over a six-year period and determined on rand platinum group metals (PGM) prices over the life of mine of the Mototolo venture.
The total purchase consideration would be capped at R22 billion.
Mototolo is currently operated as a 50/50 joint venture between Anglo American Platinum and a partnership between Glencore and Kagiso Tiso Holdings, which has an 11 percent stake.
"The acquisition of Glencore’s stake in the Mototolo JV increases Anglo American Platinum’s interest in a mechanised, low-cost, high quality resource, creating another major PGM hub for the Company," Amplats CEO Chris Griffith said.
"The transaction unlocks significant optionality for the company in its wholly-owned Der Brochen resource.”
The Mototolo operation is 30km west of Burgersfort in Limpopo in the Eastern Limb of the Bushveld complex and operates under a mining right covering nine square kilometres.
Amplats said the acquisition of Glencore’s interest would secure significant infrastructure for the company, allowing for value-enhancing optionality between the Mototolo JV area and the adjacent wholly owned Der Brochen resource, creating a major platinum group metals hub.
By combining the Mototolo joint venture area with the downdip and Der Brochen, the life-of-mine was also significantly extended from the current estimated five year life of mine to well in excess of 30 years.
The transaction is subject to a number of conditions, including Competition Commission approval and is expected to be effective in the fourth quarter of 2018.