By Sanjeeban Sarkar
(Reuters) – Platinum mining company Lonmin Plc said on Friday it would buy Anglo American Platinum’s (Amplats) stake in their joint venture Pandora mine for between 400 million rand ($28 million) and 1 billion rand.
The acquisition of Amplat’s 42.5 percent stake, which is subject to regulatory approval, will give London-based Lonmin a 92.5 percent stake in the mine, leaving Northam Platinum Ltd with 7.5 percent. [nJseK0027a]
“If you take out Anglo Platinum from the decision making process, it can be easier to progress things for the asset,” Peel Hunt analyst Peter Mallin-Jones said.
The acquisition will be paid for with 20 percent of free cash flow from the Pandora mine over the next six years, with the final price dependant on platinum prices.
For Amplats, the transaction brings it closer to its goal of offloading its labour intensive mines to focus on mechanised mines. The company completed the sale of the Rustenburg mines to Sibanye Gold last week, with just one mine left unsold.
“Amplats was not going to go for the development plans for the asset because it had alternate assets to focus on,” Mallin-Jones said.
A recovery in platinum prices and cost cuts helped Lonmin, which was hit hard by a five-month wage strike in 2014, to post a narrowed annual loss in May. [nL5N18D0S8][nL8N15C16V]
Lonmin shares, which have climbed 150 percent this year, fell 10 percent in London. Amplats shares were down 3.16 pct on the Johannesburg Stock Exchange
($1 = 14.3245 rand)
(Additional reporting by Zandi Shabalala in London; Editing by Alexander Smith)
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