Impala Platinum Holdings (Implats) has concluded a broad-based BEE transaction valued at about R9bn, the biggest empowerment deal so far in 2024.
The transaction forms part of the merger approval conditions set in place for Implats’ acquisition of Royal Bafokeng Platinum in 2023 after it outbid Northam.
“The transaction demonstrates the group’s confidence in our business, the PGM sector and SA,” said Implats CEO Nico Muller on Monday, referring to platinum group metals.
“While the transaction was initially conceived as part of our commitments related to acquiring Impala Bafokeng, the intention was clearly focused on enabling broad-based participation in the resulting entity — a stronger, longer-life and more sustainable Rustenburg asset base — and meaningful empowerment ownership in the group’s SA mining, smelting and refining assets,” he said.
“This provides a solid foundation for sustainable and enduring benefits for the beneficiaries of the transaction and expands ownership across the SA PGM sector.”
The deal will result in 13% broad-based BEE ownership at both Implats, which owns the group’s Impala Rustenburg mining operations and Impala Refineries assets, as well as in Impala Bafokeng, which it acquired in 2023, through its wholly owned subsidiary Impala Bafokeng Resources.
The 13% equity ownership in Implats and Impala Bafokeng Resources will be structured to award 4% ownership to a community trust, 4% to an employee trust and 5% to a strategic empowerment consortium, Siyanda Resources.
According to the details of the deal, the Bokamoso Consortium, led by Siyanda, which owns Siyanda Bakgatla Platinum Mine in the Rustenburg area, will hold a 5% shareholding in the Impala and Impala Bafokeng assets.
This will be funded by a R100m equity injection by the Bokamoso Consortium, and vendor funding for the remaining amount by way of preference shares issued by special purpose vehicle Bokamoso Rustenburg to Implats and Impala Bafokeng.
Funding
The 4% shareholding that will go to host communities through a community share ownership trust will be funded through interest-free vendor loans from Implats and Impala Bafokeng. The 4% shareholding for Impala Bafokeng employees will be funded by an interest-free vendor loan from Impala Bafokeng.
In both instances, the trusts will be entitled to distribute 65% of dividends earned through their shareholding, with the remaining 35% to go towards servicing the loans.
Siyanda Resources, established at the height of BEE deals in the country, has grown a sizeable portfolio over the years, particularly in the PGM sector.
The company, led by Lindani Mthwa, in 2018 bought a majority stake in Union Mine from Anglo American Platinum (Amplats). It also has stakes in Sibanye Rustenburg Platinum Mine, among other investments in the mining industry.
Implats said it had selected Siyanda Resources due to its experience in the PGM sector.
“Implats selected Siyanda Resources as the lead empowerment partner due to its demonstrable track record as a pre-eminent strategic empowerment partner in the PGM sector, the experience of its executive and operational leadership, its standing, reputation and depth of relationships in the broader Rustenburg community, and its proven ability to raise funding to meet its participation obligations,” it said.
Implats is worth just under R100bn on the JSE.
The deal comes during a challenging period for the PGM sector globally, with the SA industry experiencing particularly difficult circumstances, including plunging prices.
The palladium price has slumped nearly 50% over the past year, while rhodium has lost about two-thirds of its value. In contrast, platinum has mainly remains range bound at $900-$1,000/oz for much of the past five years.
SA, the world’s biggest platinum producer, has borne the brunt of plunging PGM prices over the past year. In response, producers have been intensifying their efforts to cut costs and trim capital budgets as margins become tighter.
Implats in April said nearly 4,000 jobs were on the line across its operations as the sector battles low prices and surging costs.
Amplats, which is being unbundled by Anglo, is also planning to cut 3,700 jobs in SA in a bid to reduce costs by R5bn, while Sibanye-Stillwater has already let go of 2,600 workers at its SA PGM operations.
Update: May 20 2024
This story has been updated with additional information.
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