Platinum producer Lonmin has agreed to sell a controlling stake in its Limpopo Baobab mining division to black empowerment group Shanduka.
Lonmin said the deal will enable it to work with Shanduka to develop Limpopo on a manageable scale, as well as furthering Shanduka’s strategy of operating mining assets in chosen commodities.
The deal will entitle Shanduka to subscribe for 50 per cent plus one share in the issued capital of Messina Platinum Mines Ltd (MPML), which is wholly owned by a subsidiary of Lonmin’s Western Platinum Ltd (WPL)—thus giving Shanduka control and operational management of Lonmin’s Limpopo division.
The Limpopo division comprises the Baobab mine, including the Baobab shaft and infrastructure and a 90,000 tonnes-per-month concentrator held by Messina Platinum Mines Limited (MPML); a 50 per cent share in the Dwaalkop joint venture held by WPL; the Doornvlei Project, held by MPML; and a prospecting area known as ‘Zebediela’s Location’, also held by MPML.
The deal, worth R1.1 billion, will enable development and increased production from the Baobab shaft, as well as development of the projects at Dwaalkop and Doornvlei.
Commenting on the announcement, Ian Farmer, CEO of Lonmin, said: “This transaction has the potential to extend our relationship with Shanduka and provides a clear roadmap for the development and future expansion of our Limpopo division.
“It gives Shanduka the opportunity to become a BEE controlled PGMs mining and operating company in line with the DMR’s empowerment objectives and is a further demonstration of our strong and ongoing commitment to achieving 26 per cent empowerment in terms of the Mining Charter.”
Phuti Malabie, CEO of Shanduka Group, added: “This transaction evidences Shanduka’s progress from a BEE investment company to an owner and operator of a substantial mining asset, in line with our country’s transformation objectives.
“Our partnership with Lonmin, as well as our track record of sustainable investment in the South African mining industry, now enables us to conduct this feasibility review on the very prospective Limpopo orebody, mine and other existing infrastructure.”
Headquartered in London, Lonmin is the world's third largest primary platinum producer and employs around 24,000 people.
