The Kroondal mine
The transaction entered into between miner Anglo American Platinum (Amplats) subsidiary Rustenburg Platinum Mines (RPM) and dual-listed Sibanye-Stillwater’s subsidiary Sibanye Rustenburg Platinum Mines, as announced on January 31, 2022, has been brought forward, resulting in the Rustenburg operation acquiring RPM’s 50% share in the Kroondal pool and share agreement (PSA) and the group assuming full ownership of the low cost, mechanised Kroondal operation, effective November 1.
The sale transaction has been implemented with all conditions precedent having been met, including receiving approval from the Competition Commission (without conditions); and receiving Section 11 consent terms under the Mineral and Petroleum Resources Development Act for the transfer of the mining right, currently held by RPM, to Sibanye-Stillwater’s Rustenburg operation.
The parties have further agreed to waive the last condition precedent for the delivery of the 1.35-million platinum, palladium, rhodium and gold (4E) ounces by the Kroondal operation to RPM, subject to several revised terms.
Under the terms of the sale agreements entered on January 31, 2022, Kroondal’s infrastructure has been used to mine through the boundary into Sibanye-Stillwater’s adjacent Rustenburg operations resource for the benefit of the PSA parties.
This enabled Amplats to generate cash flows from its 50% share of the remaining economic reserve of Kroondal earlier and at a lower cost of production, and this material was processed by the company under the pre-existing Kroondal purchase of concentrate terms.
The disposal will be effective after the delivery of the full 1.35-million ounces of 4E, which is expected to be in the second quarter of 2024.
To maintain the economic intent of the original terms of the agreement, Sibanye-Stillwater will pay Amplats an agreed percentage of the cash flows generated by Kroondal until the delivery of the 1.35-million ounces of 4E is achieved.
Amplats will sell its 50% interest in the PSAs, transferring all assets and liabilities to Sibanye-Stillwater for a consideration of R1.
Amplats will continue to process the concentrate produced from Kroondal under the pre-existing purchase of concentrate agreement until the delivery of the full 1.35-million ounces of 4E, after which the concentrate will be processed under the toll-and-purchase agreement that was concluded with Sibanye-Stillwater as part of the Rustenburg transaction.
“Concluding the transaction earlier enables effective consolidation of these operations under a single owner. By extending the operating life of the Kroondal operation, which as a standalone operation was constrained by the existing PSA agreement,” said Sibanye-Stillwater CEO Neal Froneman.
“We are now able to realise the true potential of our adjacent resources by utilising the mechanised and low-cost Kroondal operation to mine across the boundary with the Rustenburg operation.
“This will accelerate the extraction of more remote parts of the Rustenburg operation's orebody, expected to sustain employment for thousands of employees until 2029 and ensure the creation of significant shared value for all stakeholders in the region,” he added.
“The sale of our interest in Kroondal to Sibanye-Stillwater represents a positive step towards simplifying Amplats' portfolio. We have expedited the effective date to allow us to focus our attention and resources on maximising the value from our core assets,” Amplats CEO Craig Miller said in a separate statement.