JOHANNESBURG - Speculation has intensified over the possible merger between Lonmin, the world’s third-largest platinum producer, and Sibanye-Stillwater following news that the Public Investment Corporation (PIC) has increased its stake in Sibanye to just under 11%.
Sibanye-Stillwater announced on Friday it had received notification the PIC would up its stake in the miner to just over 10.8% from 8.6%. Nedbank Corporate Investment Banking said the increase in the PIC shareholding signalled a possible merger, although Sibanye has denied this.
“Could this point to the long-expected combination of Lonmin and Sibanye? “A merger with Sibanye could resolve some of the pressure,” Arnold van Graan said.
“Although we still see a deal between the parties being possible, we do not believe it is imminent, given the offtake agreement between Sibanye and Anglo American Platinum (Amplats) that still has some three years to run, plus a two year notice.” The PIC manages R1 trillion in assets on behalf of government employees.
Sibanye spokesperson James Wellsted disputed the speculation, saying that institutional investors increase shareholding all the time.
Sibanye last month announ-ced that investment management firm, Van Eck Associates Corporation, had increased its shareholding to 10.19% from 7% while Investec upped its stake to 5.1% from 4.2%. On Wednesday, the mine said 6 976 jobs would be cut, including contractors, at its loss-making Cooke underground operations in Randfontein.
The company said the retrenchments would involve 2000 employees, 1350 of whom have already elected to take voluntary packages. About 3601 contractors will be displaced. Cooke, a gold and uranium producer, has been loss-making despite several interventions by the company and stakeholders.
The National Union of Mineworkers (NUM) claimed that Sibanye Gold had sent forced retrenchments termination letters to more than 2000 workers at Cooke 1 to 3.
“The company has already instructed workers not to go underground as it is preparing to put the operations on care and maintenance. “More than 2000 workers who received the termination letters will attend the mass meeting,” the union said.
NUM also said that members would continue their struggle against Sibanye’s treacherous capitalist tactics. “NUM members will continue to show their fighting spirit and tenacity against Sibanye Gold Stillwater,” NUM said, claiming that chief executive Neal Froneman was “pursuing a strategy of sabotage and destroying jobs in South Africa.”
“We are very worried that Sibanye has decided to destroy jobs in South Africa in order for them to finance their new acquisition which is Stillwater in the United States of America,” the NUM said.
The asset base of Sibanye has been entirely based in South Africa.
In August, the company re-branded to Sibanye-Stillwater, in what it described as a process of natural evolution.
Sibanye-Stillwater was established after Gold Fields spun off its ageing South African assets and listed in 2013. Its transition came after it acquired Aquarius Platinum in April 2016 and the Rustenburg operations shortly thereafter. It acquired Stillwater, a US based platinum group metals company, in May.