- Announcement on mines sales to Sibanye Gold due Wednesday
- Deferred amounts to be based on price of the precious metal
Anglo American Platinum Ltd. is set to sell its Rustenburg assets to Sibanye Gold Ltd. for an initial payment of at least $100 million and further deferred amounts based on the price of the precious metal, according to people familiar with the process.
Amplats, as the world’s biggest platinum producer is known, and Sibanye will make an announcement on the asset sales on Wednesday after starting talks about a year ago. Anglo American Plc, which owns 77 percent of Johannesburg-based Amplats, has been trying to dispose of the Rustenburg mines in South Africa as it seeks to exit operations that don’t return 15 percent on capital employed.
Sibanye Gold spokesman James Wellsted declined to comment. Anglo American will provide an update on Wednesday, Pranill Ramchander, a spokesman for Anglo American in Johannesburg, said by phone, declining to comment further.
Amplats’ shares rose as much as 3.2 percent and were up 1.8 percent to 317.69 rand at 3:26 p.m. in Johannesburg. Sibanye gained 5.2 percent to 17.04 rand, the highest since Aug. 21. Platinum for immediate delivery climbed 1.6 percent to $1,004.20 an ounce, paring the drop this year to 17 percent.
Anglo American has been selling non-core assets to lower costs and pay down debt, raising almost $2 billion this year amid a commodities rout that’s sent prices to a 16-year low. Last month, the London-based producer announced the sale of two copper mines in Chile for $300 million, potentially rising to $500 million.
A deal would allow Amplats, which had considered separately listing the mines, to offload assets in need of investment and focus on shallower, more mechanized operations. For Sibanye, which got a $350 million debt facility in August and operates four aging gold mines in the country, a deal would boost future cash flow to pay dividends.
The Bakgatla ba Kgafela community, which has a 15 percent stake in Amplats’s Union mine, will be included in the transaction, as will other groups, Kgosi Nyalala Pilane, chief of the Bakgatla, said by phone.
Under South African law, at least 26 percent of mining asset needs to be owned by black shareholders to redress economic disparities caused by white-minority apartheid rule that ended in 1994.