Johannesburg - Anglo American Platinum (Amplats) said on Wednesday it would sell off its stakes in Union Mine and MASA Chrome Company to Siyanda Resources for R6.4 billion.Amplats said that its subsidiary, Rustenburg Platinum Mines, has entered into a sale and purchase agreement to sell its 85 percent interest in Union Mine and its 50.1 percent interest in MASA Chrome to a subsidiary of Siyanda Resources.
The world's leading primary producer of platinum group metals said the sale of Union Mine and MASA Chrome would advance its repositioning to focus on its most competitive assets.
In 2013, Amplats announced its intention to reconfigure, and thereafter exit the disposal assets.
Since then, significant restructuring has been delivered at Union, including combining North and South Mines into a single operation and placing North declines, South declines and the Mortimer Merensky concentrator on care and maintenance.
Union Mine and MASA Chrome are located in both the Limpopo and North West provinces.
Union Mine operates under a mining right covering an area of 119 square kilometres.
Amplats, a member of the Anglo American plc group, will retain the Mortimer smelter operation after the sale.
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Amplats chief executive Chris Griffith said it was pleased to deliver another important milestone in the strategic repositioning of the miner's portfolio.
"The Union Mine and Masa Chrome operations are quality assets that I believe have long-term and sustainable potential under Siyanda's ownership," Griffith said.
"This transaction is beneficial for both parties, whilst also creating a sustainable future for the operation."
The transaction, which is expected to complete during the second half of 2017, constitutes a Category 2 disposal and, as such, no shareholder approval is required.
Under the terms of the agreement, the transaction comprises an initial disposal consideration of R400 million, payable in cash, as well as a deferred consideration based on 35 percent of cumulative positive distributable free cash flow paid annually as an earn-out, for a period of ten years with a cap of R6 billion.
The maximum transaction consideration receivable by Amplats is therefore R6.4 billion.
Siyanda would sell concentrate produced by the Union Mine to Amplats for a period of seven years from the effective date of the transaction on pre-agreed commercial terms and thereafter Amplats would toll treat concentrate for the remaining life of Union Mine.