[miningmx.com] – SHANDUKA Group said market conditions would not
influence its decision on whether or not to buy for R1.1bn ($135m) a controlling stake
in Lonmin’s currently mothballed Limpopo division.
“We are close to making a decision, and we’re hoping it will be positive,’ said Phuti
Mahanyele, CEO of Shanduka Group in an interview. Former trade unionist and
politician Cyril Ramaphosa is a shareholder in Shanduka Group. “We are keen on the
sector. Market conditions won’t weigh on our decision. Platinum is an asset which we
view as strategic to Shanduka Group,’ said Mahanyele.
South Africa’s platinum sector has been under enormous strain lately, with rising
costs and a supply surplus – estimated at 480,000 oz this year – narrowing margins.
Anglo Platinum, the listed subsidiary of Anglo American, is consequently reviewing its
portfolio, which is expected to result in the sale of its joint ventures.
Lonmin announced in October last year that Shanduka would be entitled to subscribe
for 50% plus one share in Messina Platinum Mines – the entity that comprises the
Limpopo province assets – pending a feasibility study. Messina Platinum is wholly
owned by Lonmin’s Western Platinum, in which Lonmin would retain a 82% stake.
In terms of the provisional arrangement with Shanduka, Lonmin’s Western Platinum
will also retain the option to fund an expansion of the Limpopo assets in return for
shares if the division takes production to more than 250,000 ounces annually.
Mahanyele added that a listing of Shanduka Group’s assets might happen sooner than
anticipated. “A listing seems like the next big step for us, and we think it could be
done in three years. It will create liquidity for our shareholders and it gives us access
to other funding,’ she said.
Mahanyele has been quoted in the past that Shanduka Group might list some or all of
its assets in about five to seven years.
The big question, however, is what Shanduka Group will list. It views some
investments – such as a 0.45% stake in MTN, and 1.4% stake in Liberty Group – as
providing optionality, Mahanyele said.
A position in fast-moving consumer goods, such as the 100% purchase of McDonald’s
SA, has been developed in an effort to reweight its portfolio away from mining and
energy.
“We’re still in that discussion whether the listed vehicle will be diversified or not,’
she said.
