Anglo Platinum Faces 30% Mine-Stake Request From Community

A community near South African mines operated by Anglo American Platinum Ltd. said it wants as much as 30 percent of Union and three Rustenburg operations that the world’s largest producer of the metal is selling.

The Bakgatla Ba Kgafela community, which owns 15 percent of Union, held talks with its preferred bidder for the four mines about taking a shareholding in the operations as a black economic-empowerment partner, Kgosi Nyalala Pilane, chief of the community, said in an interview in northern South Africa on Tuesday. Pilane didn’t want to identify the bidder because Amplats, as the Johannesburg-based company is known, may choose a different buyer for the mines.

“It will just be one company and that’s where we’ll also get 30 percent at the group level,” Pilane said. The community will pursue talks with any party that wins the bid, he said. “We have our own preference, but we’re still open.”

Amplats is selling the four deep-level, labor-intensive platinum mines as it seeks to prioritize capital for expanding the mechanized Mogalakwena pit. Its decision came after a five-month strike last year idled most of the mines owned by Amplats, Impala Platinum Holdings Ltd. and Lonmin Plc.

The Union and Rustenburg mines are together worth about 5 billion rand ($425 million), according to Rene Hochreiter, a Johannesburg-based analyst at Noah Capital Markets Pty Ltd.

Economic Empowerment

South African legislation requires that all mines are at least 26 percent held by black shareholders such as the Bakgatla ba Kgafela people, a policy that’s meant to narrow economic disparities created under apartheid.

Bidders for mines started due-diligence studies in January, Chris Griffith, chief executive officer of Amplats, said Feb. 9. The company may also take a decision on whether it will separately list the Rustenburg mines by the end of June, Griffith said.

Sibanye Gold Ltd., the biggest producer of gold from mines in South Africa, is seeking to buy one or more of Amplats’s mines “at the right price,” Chief Executive Officer Neal Froneman said last month.

The Bakgatla “are material stakeholders in this area and for any successful mining operation your local communities need to be supportive and integrated,” he said in an e-mail. Sibanye’s strategy includes communities, he said.

The Bakgatla ba Kgafela community acquired the 15 percent stake in Union in 2006 for 420 million rand through loans which the group paid off in less than two years as the metal was trading at levels in excess of $2,200 an ounce, Pilane said.

Job Creation

Dividends from the investment enabled the community’s administration to create more than 3,000 jobs through an urban-development project, investment in other mining operations and the opening of factories, he said.

Platinum for immediate delivery fell to $1,155.50 an ounce on Feb. 24, the lowest since July 2009. It was little changed at $1,186.75 an ounce at 8:27 a.m. in Johannesburg on Wednesday.

The community also owns a 27 percent stake in closely held Sedibelo Platinum Mines Ltd., formerly known as Platmin, in a venture with Pallinghurst Resources Ltd. and the government’s Industrial Development Corp.

Sedibelo postponed a proposed listing on the Johannesburg Stock Exchange last year as metal prices fell and the three largest producers, including Amplats, were hit by the strike, Pilane said.

“Once some of these problems get sorted we’ll be ready for a take-off,” he said.

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