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Impala Signs Terms for Zimbabwe Unit Sale to Black Citizens

Jan. 11 (Bloomberg) -- Impala Platinum Ltd. signed the terms to sell a controlling stake in its Zimbabwean platinum unit under a law to hand ownership to black citizens.

The agreement stipulates a payment of $971 million with equity ownership going to a select number of indigenous groups, Impala’s Zimplats unit said today in a statement. Zimplats will provide the buyers with funds for the purchase at an interest rate of 10 percent a year, according to the terms.

“We contend that clarity regarding ownership structures may provide Zimplats with sufficient confidence to commit to additional future expansions,” analysts led by Justin Froneman at Johannesburg-based SBG Securities Ltd. said in a note.

Zimbabwe has been pushing companies to meet a 2010 law obligating operators to sell 51 percent of domestic mines to black locals or a state-owned fund. Aquarius Platinum Ltd. last month said it would sell 51 percent of its holding in Mimosa, a platinum venture in which it is an equal partner with Impala, for $550 million.

Impala dropped 1.4 percent to 172.5 rand in Johannesburg.

“If I were an Impala shareholder, I would not be impressed,” Sasha Naryshkine, an investment manager in Johannesburg at Vestact Ltd., which oversees more than 1 billion rand ($114 million) in assets, said in a note. “Impala’s revenue from the government will diminish. They hold the risk of the entire mine but only own 49 percent of the asset.”

Zimplats will continue to manage the mines in the country, while the indigenous groups will be able to appoint directors.

The government’s ability to fund its share of any capital spending will probably be called into question, potentially reducing the Implats funding burden associated with future expansions at Zimplats, according to the analysts from SBG, which maintains a buy recommendation on the shares.

Zimplats produced 187,100 ounces of platinum in fiscal 2012 from three underground operations, Impala’s website shows.

To contact the reporters on this story: Elisabeth Behrmann in Sydney at ebehrmann1@bloomberg.net; Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

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