Sibanye-Stillwater will provide A$30m (about R365) in emergency support for Australian miner New Century Resources after it suspended operations at its Century operations in northern Queensland after extreme weather.
The multinational precious and base metals miner said the money would be allocated to the zinc tailings operations that were flooded after record rainfall earlier this month, as well as the Karumba port facility. Production was halted two weeks ago and work is expected to resume in April.
“No safety incidents were experienced, and core infrastructure remains secure, however, due to the extent of the flooding event, operations are currently estimated to remain suspended for a further two to three weeks, resulting in approximately 15,000-20,000 tonnes of zinc metal production being affected,” New Century said.
Sibanye owns 20% of New Century and has made a R1.5bn unsolicited offer to buy the remaining 80%, saying it was unhappy with the company’s strategic direction.
Business Day reported earlier this week that New Century suspended trading in its shares on the Australian Securities Exchange as Sibanye closed in on the deal.
Business Day reported earlier this week that New Century chairperson Kerry Gleeson told shareholders that Sibanye’s offer is beneficial to all parties, adding that there was uncertainty whether New Century’s could continue to operate as a stand-alone entity.
An environmental bond facility (EBF) with Argonaut Insurance and Macquarie Bank requires New Century to amortise a further $160m under an agreed schedule. An A$10m payment is due on April 3 and the final completion date is in April 2025, she added.
“There is no guarantee that New Century will generate sufficient profits from operations to meet its amortisation obligations under the EBF, assuming it is not replaced by an alternative mechanism or a renegotiated amortisation profile in due course,” Gleeson said, adding that Sibanye may provide alternatives.
With Kabelo Khumalo
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