The acquisition of Bokoni will enable us to scale our platinum group metal portfolio and improve ARM’s global competitiveness.
AFTER years of hints, innuendos, sort-of promises and vague statements that African Rainbow Minerals (ARM) intended doing a major deal to expand and/or diversify its operations, Patrice Motsepe finally took the plunge late in 2021, buying the mothballed Bokoni platinum mine for R3.5bn in cash. ARM also committed to investing a further R5.3bn over the next three years to redevelop Bokoni as a new mine. That took nearly everybody by surprise because, when you attempted to boil down Motsepe’s various utterances over the past few years, it appeared copper was his top priority while Bokoni is, well, a dog.
Bokoni was previously known as Lebowa Platinum and neither former owners Anglo American Platinum nor the last operator, Anooraq Resources/Atlatsa, could make a go of it because of the difficult mining conditions. Bokoni was finally put on care and maintenance in 2017. The attraction for ARM is the huge size of the Bokoni platinum group metals (PGM) resource which, at 153 million ounces, is the second largest in South Africa, according to ARM. The group also believes it can turn the operation around by developing a new, mechanised mining operation on the UG2 reef, where the previous operators had focused on the Merensky Reef.
The new Bokoni will be low cost because of its mechanised approach, operating at shallow depth, and it will also benefit the group because of its proximity to ARM’s other two nearby operations, the Modikwa and Two Rivers mines. All in all, Motsepe reckons this deal will position his group as a “significant” PGM producer, which analysts speculate could be listed separately. Motsepe’s unerring eye for management talent will be tested again this year, with ARM CEO Mike Schmidt set to be replaced.