[miningmx.com] – ROYAL Bafokeng Platinum (RBPlat) added its name to the list of suitors for shafts Anglo American Platinum (Amplats) said it may sell.
RBPlat CEO, Steve Phiri, said he was “not disinterested (impartial) in anything that adds value to the company”, adding, however, that “the price has to be right”.
“When your neighbour’s house is on sale, it doesn’t hurt looking,” said Phiri.
The two companies are joint venture partners in the Bafokeng Rasimone Platinum Mine (BRPM) one of the joint ventures in which Amplats intended to remain invested.
On July 21, Amplats confirmed its intention to sell its Union section as part of a portfolio restructuring to which it added its Rustenburg shafts as widely expected. It also said it would sell the Pandora Joint Venture with Lonmin and, possibly, its 49% stake in Bokoni Platinum Mines which it shares with Atlatsa Resources.
Earlier RBPlat said interim share earnings would be 33% higher on the back of a weaker rand against the dollar. Phiri said RBPlat was expecting a strong financial performance for the remainder of the year while the platinum market was also improving.
Martin Prinsloo, CFO for RBPlat, said price would be the final arbiter on whether the firm became involved in any acquisition activity with Amplats or Lonmin or Impala Platinum which also indicated during the five-and-a-half month strike earlier this year that they may restructure assets.
“From a risk return basis, you would be guided towards spending the money where there is the greatest certainty on success, I guess,” Prinsloo said.
“I certainly think there are options for sale at Anglo which is not suitable to where we are in the industry. We wouldn’t see ourselves as marginal orebody miners. So that disqualifies some of them [assets].
“Yet others have not suddenly become bad assets, so it doesn’t hurt to have a look,” he said, adding that his years as an investment banker had taught him deals predicated on synergies alone were doomed.
“All the talk about synergy … I don’t necessarily buy into that. The only thing that allows you to add value is what you pay for it. If the input price is right, you can unlock other things,” said Prinsloo.
RBPlat still has R7bn of its R11bn Styldrift project to finance (including about R2.5bn in escalation and contingencies), therefore the balance sheet is still to be geared up.
RBPlat recently closed a R1bn revolving credit facility – saving R600,000 on ‘commitment fees’ – preferring instead to raise R2.5bn to R3bn in the first half of 2015 in term loans, said Prinsloo.
Sibanye Gold CEO, Neal Froneman, said on July 31 that his company remained interested in potential asset sales by Amplats, Implats and Lonmin. “We have got five targets and we have been through the front doors of all of them,” he said. “We continue to engage with them.”
Amplats’ Griffith said the group would be “doing well” if it were to dispose of its assets before the end of 2015. He also said Amplats would price the assets marked for sale at book value; that is, the carrying value on the balance sheet after write-downs.
