Implats warns of “devastating” impact on Rustenburg as mulls quitting RBPlat bid

Nico Muller, CEO, Impala Platinum

IMPALA Platinum (Implats) CEO Nico Muller said he expected the Public Investment Corporation (PIC), the state-owned asset manager to decide imminently how it intended to vote on its offer for Royal Bafokeng Platinum (RBPlat).

But he warned the firm was preparing to abandon its full takeover bid – a development that could have a major impact on jobs in Rustenburg, the North West province city that sits at the centre of South Africa’s platinum group metal (PGM) industry.

Implats owns about 40.71% of RBPlat after bidding R150/share in cash and shares last year and was hopeful of winning 42% control, said Muller. However, Northam Platinum has indicated its intention to launch a bid of its own worth R172.70 per RBPlat share. It currently has a stake of about 38%.

Faced with Implats’ offer and Northam’s intention to offer, the PIC elected not to make a decision fearing a bidding war between Implats and Northam that would destroy value.

Muller said, however, that Implats would abandon the transaction if its ambitions were frustrated. An additional complexity Implats faces is a delay in the granting of a compliance certificate from the Takeover and Regulation Panel (TRP) which reports to the department of trade and industry.

The certificate is the only regulatory hurdle required by Implats in order to close its offer. Last year, Northam filed an objection to the grant of the certificate on the basis of an alleged unlawful share issuance and contractual agreements between RBPlat and its COO and CEO last year.

Muller said the process of litigation, including appeals and potential new objections could see its offer for RBPlat drag on “potentially for years”.

As a result, the company was prepared to move in other directions rather than persist with an outstanding bid for RBPlat. Asked at the firm’s interim results presentation today when a decision would be made Muller said he would be “extremely surprised” if the matter was undecided a year from now.

“Although strategically important to the company, it cannot hang its future on the outcome of a process where it has lost control,” said Muller. “There is a time we are approaching where the company has no choice but to consider alternative directions and that may mean a different investment and different growth path,” he added.

Muller indicated Implats could turn more of its investment attention to Zimbabwe where it had recently committed to the construction of a third concentrator and base metals refinery. There were “other options as well”, he said of Zimbabwe’s PGM industry.

Muller said that from an investor perspective withdrawing its offer for RBPlat was “not the worst outcome in the world. I just think it will be devastating from a social point of view”. Implats’ Rustenburg operations are contiguous with RBPlats. As result, being able to mine across boundaries would help preserve a portion of 40,000 people Implats employed.

The performance of RBPlat had also deteriorated whilst the bid was underway which Muller said was “value destructive”. The company said last month it would report a decline in its basic interim earnings for the 12 months ended December 31 of nearly 51%.

Steve Phiri, CEO of RBPlat, told Miningmx in August that the competition between Implats and Northam Platinum for control of RBPlat “brings instability and consternation among workers”.


Implats declared an interim dividend of 420 cents a share or the equivalent of a R3.6bn payout which was in line with its 30% of free cash flow, pre-growth capital dividend policy.

This was off the back of solid interim earnings. At R16.48/share, basic earnings were 2.7% lower year-on-year for the six months ended December 31. Headline earnings were R16.54/share, a reduction of 2.1% year-on-year.

The PGMs producer paid an interim dividend of 525 cents/share, equal to R4.5bn in the corresponding period of the previous financial year.

As reported last month, refined production for the six months was 9% lower at 1.48 million ounces which includes saleable production from Impala Canada.

Implats said smelting capacity was constrained by increased power curtailment amid South Africa’s energy crisis. About 9,000 6E oz of mined volumes were foregone and 38,000 6E oz of refined production were deferred owing to curtailments.

Smelting capacity was also impacted by the scheduled rebuild of Implats’ No 4 furnace at its Rustenburg section which started in November. Implats said it ended the period under review with about 140,000 6E oz of excess inventory.

It forecast refined production of between three and 3.15 million oz for the 12 months ended June 30 which compares to 3.09 million oz in the 2022 financial year. Inflationary pressures will result in higher operating costs, however. They are forecast to be between R18,500 and R19,500 per 6E oz for the full year compared to the previous estimate of R18,200 and R19,200/oz.

Implats said the market outlook was for improved PGM demand as logistical and supply constraints eased and the Chinese economy reopened following its Covid lockdowns last year. Supply would also be impacted resulting in a tighter market.

Said Implats: “The risk to primary global supply has been elevated by the escalation in load curtailment in South Africa and logistical and supply chain constraints in Russia”.


  1. The TRP has nothing to do with the JSE. It is an agency of the DTI&C and a creature of the Companies Act.

  2. “Implats owns about 40.71% of RBPlat after bidding R90/share in cash and shares last year…” – this is incorrect as Implat’s bid is R150/share, made up of R90 cash and R60 in shares.

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