Anglo American Platinum Ltd., the world’s biggest producer of the metal, will buy two South African mines as part of a 3.5 billion-rand ($377 million) restructure of Atlatsa Resources Corp.
The transactions will reduce Atlatsa’s debt to Anglo American Plc’s platinum unit by 75 percent to 830 million rand, the Johannesburg-based company known as Amplats said in a statement today. Amplats’ stake in Atlatsa will decline to 22.5 percent from 26 percent, it said.
Atlatsa’s biggest operating asset is the Bokoni platinum mine, of which it owns 51 percent and Amplats the rest. The company lost 35,500 ounces of platinum group metals’ output during a two-month strike that ended in December. Producers in South Africa are struggling with higher costs as strikes led to above-inflation wage gains, while demand for the metal wanes.
“Capital expenditure of some 2.3 billion rand associated with expansions at Bokoni mine has been deferred,” Atlatsa said in a separate statement.
Amplats will buy the eastern section of the Ga-Pasha mine, adjacent to its Twickenham operation in the northernmost Limpopo province in South Africa. Atlatsa’s Boikgantsho project will be consolidated with Amplats’s Mogalakwena. Both mines will cost cost Amplats 1.7 billion rand.
Amplats will also subscribe for 125 million new Atlatsa shares at 6 rand each. Ga-Pasha West will be integrated into the Bokoni mine, which will increase output to 160,000 metric tons monthly from 100,000 tons now, it said.
Atlatsa will get an additional debt facility of about 720 million rand from Amplats, taking the total amount to 1.55 billion rand, it said. The average cost of the debt, which will be repayable between 2018 and 2020, will decline to 2 percent from about 13 percent. It will also give Atlatsa a working-capital facility of 90 million rand.
Atlatsa shares surged 5.5 percent to 2.11 rand by the close in Johannesburg. More than 64,000 shares, or more than double the daily average over the past three months, changed hands. Amplats declined 3.7 percent to 386.90 rand, the lowest level since Nov. 28.