Glencore to retain 50% share of Mototolo with Amplats

GLENCORE has all but exited the platinum industry following the unbundling of its Lonmin stake to shareholders in 2015, and the sale of Eland Platinum to Northam Platinum for R175m last week.

However, it appears it will keep a toe-hold in the sector through its 50% stake in the Mototolo Joint Venture which it manages and shares with Anglo American Platinum (Amplats). Glencore holds its stake through the Glencore Kagiso Platinum Partnership, its black economic empowerment partner.

Market speculation is that the partners were open to a deal as platinum is non-core to Glencore while the stake in Mototolo is core to Amplats.

Charles Watenphul, spokesman for Glencore, said that “the status quo remains” at Mototolo without elaborating. Glencore inherited the asset from Xstrata which in 2005 formed a pool and share agreement with Amplats.

In terms of the agreement, the two partners would contribute equal amounts to the R1.35bn project the aim of which was to produce 132,000 ounces of platinum and 82,000 oz of palladium in concentrate a year. Amplats also agreed to purchase half of the concentrate produced from Mototolo for refining.

Amplats built and operates a 200,000 tonnes per month concentrator at the mine which, in the 2016 financial year, it operated at an average monthly milling rate of 214,000 tonnes. Mototolo is adjacent to Amplats’s Der Brochen property, some 30km west of Burgersfort in the Limpopo province.

In Amplats 2016 financial year, Mototolo produce 116,000 of platinum produced ounces (2015: 115,000 oz) and recorded its best first half performance since inception.

“The Mototolo JV remains part of the Anglo American Platinum’s core portfolio and we will not comment on speculation pertaining to the future of the JV operation,” said Mpumi Sithole, spokeswoman for Amplats.

The joint venture generated R286m in net free cash flow in the 2016 financial year down from R354m in the previous year but where the statements were restated.