Modern Mining September 2015

PLATINUM

Sibanye Gold has performed impressively in turning around the ageing, high- cost gold-mining operations which were previously part of Gold Fields’ South African portfolio. With its much-anticipated acquisition of Anglo American Platinum’s Rustenburg Operations now confirmed, the question is whether it can produce a similar ‘miracle’ in the platinummining field and secure the future of low-margin assets which are considered non-core by the present owner. Sibanye Gold takes the plunge into platinum

Three of the mining operations covered by the deal are relatively old, with Khuseleka (now part of Thembelani) and Thembelani itself hav- ing started operations in the early 1970s and Siphumelele in the early 1980s. Bathopele is of more recent vintage, with mining having commenced in 1999. All are mined conventionally except for Bathopele which is a track- less mechanised operation. The mining depth at Bathopele, a UG2 opera-

I n terms of the deal, Sibanye will acquire the Rustenburg Operations for a minimum consideration of R4,5 billion. This is made up of an upfront payment of R1,5 billion in cash or shares and a deferred consid- eration equal to 35 % of the distributable free cash flows generated by the Rustenburg Opera- tions over a six-year period, subject to a mini- mum nominal payment of R3 billion. The Rustenburg Operations are located cen- trally on the Western Limb of the Bushveld Complex near the town of Rustenburg. They comprise the Bathopele, Siphumelele and Thembelani (including Khuseleka) mining operations, two concentrating plants, an on- site chrome recovery plant, the western limb tailings retreatment plant and associated sur- face infrastructure, as well as approximately four months of working capital on a going con- cern basis. The lease area covers an extensive 28 km strike length with the orebody extending 8 km down dip.

tion, is between 40 m and 350 m below surface while at Thembelani and Khuseleka, which both mine Merensky and UG2 ore, operations take place between roughly 400 and 950 m. Siphumelele, which currently mines Merensky ore with UG2 planned for the future, is the deepest of the mines with the mining depth ranging from 600 m to 1 350 m below surface. The transaction includes a Purchase of Concentrate (PoC) agreement for all concen- trate produced at the Rustenburg Operations until 31 December 2018. Thereafter there will be a transition to a toll treatment arrangement to smelt and refine the concentrate from the Rustenburg Operations. The acquisition will roughly double the size of Sibanye Gold – which will likely change its name to reflect the fact that it is now no longer purely focused on gold – and make it the world’s fifth largest PGM producer. The Rustenburg Operations are capable of produc- ing 800 000 PGM ounces annually. Current

Neal Froneman (left), CEO of Sibanye, and Chris Griffith, CEO of Anglo American Platinum, pictured at the presentation at the JSE announcing the acquisition (photo: Arthur Tassell).

24  MODERN MINING  September 2015