Johannesburg – Sibanye-Stillwater has announced that it has entered into an agreement with Rustenburg Platinum Mines (RPM) a subsidiary of Anglo American Platinum (AAP), through its subsidiary, Sibanye Rustenburg Platinum Mines, which will result in the Rustenburg operation assuming full ownership of the low cost, mechanised Kroondal operation.
This transaction will facilitate the life of the Kroondal operation being extended to 2029 and ensure significant value creation for the company. Sibanye-Stillwater acquired its 50% interest in the Kroondal PSA following its acquisition of Aquarius Platinum Limited in April 2016.
Sibanye-Stillwater currently operates the Kroondal operation, which is located adjacent to, and up-dip of Sibanye-Stillwater’s Rustenburg operation and the shallow Klipfontein open pit operation. The Kroondal operation is subject to a 50/50 pool and share agreement (Kroondal PSA) between Kroondal Operations (a 100% held subsidiary of Sibanye-Stillwater) and RPM.
By the end of 2020 certain shafts at the Kroondal operation had reached the boundaries of the Kroondal PSA lease area. In order to allow the affected shafts to continue operating, with effect from January 2021, a contractor mining agreement was agreed between the PSA Parties and the Rustenburg operation, providing for the mining of the Rustenburg operation from the Kroondal operation.
The Contractor Agreement permits immediate exploitation of parts of the Rustenburg operation’s orebody which would otherwise only have been mined from the existing Rustenburg operation infrastructure sometime in the future, allowing for the early conversion of a portion of the Rustenburg operation’s mineral resources into reserves and extending the life of the Kroondal operation.
In addition to the Contractor Agreement, the Rustenburg operation and RPM have entered into a sale and purchase agreement in terms of which the Rustenburg operation will acquire RPM’s 50% interest and all associated liabilities in respect of the Kroondal PSA and the Marikana pool and share agreement (which operation was placed on care and maintenance in 2012) for a cash consideration of R1.00 plus the assumption of RPM’s portion of all associated liabilities, which includes all associated closure costs and rehabilitation liabilities. The rehabilitation liabilities are currently calculated at approximately R415 million.
The implementation of the Sale Transaction is subject to the fulfilment of the following key conditions precedent:
- The delivery of 1,350,000 4E ounces by the Kroondal operation to RPM’s designated smelters through the mining of both the Kroondal PSA orebody and the Rustenburg operation’s orebody (together “the Project Area”) and the Klipfontein open pit operation. The 1,350,000 4E ounces will be delivered in accordance with the terms of the current Kroondal PSA and the current Kroondal operation purchase of concentrate (PoC) agreement with RPM. This condition precedent is expected to be fulfilled early in 2024; and
- Regulatory approvals including Competition Commission approval and Section 11 consent in terms of the Mineral and Petroleum Resources Development Act, 2002 for the transfer of the mining right, currently held by RPM, to Sibanye-Stillwater’s Rustenburg operation.
On completion of the Sale Transaction, the PSA’s with AAP will be terminated and Sibanye-Stillwater (through the Rustenburg operation), will be entitled to mine the remaining PSA ore body and ore from the Rustenburg operation that may be accessed from the Kroondal operation infrastructure entirely for Sibanye-Stillwater’s account.
The PoC agreement will also fall away on completion of the Sale Transaction, with all PGM concentrate from the combined operations being subject to the terms of the current Rustenburg operation’s sale and toll treatment agreement with RPM.
These agreements will more than double the life of the Kroondal operation, underpinning much needed sustained employment opportunities, and ensuring significant value creation for all stakeholders through the lower cost and more efficient extraction of the project area orebody than would have been the case as two standalone operations.
Sibanye-Stillwater Chief Executive Officer Neal Froneman commented “We welcome this mutually beneficial transaction which, through the full consolidation of these operations under a single owner will unlock significant value for all stakeholders by extending the operating life of the Kroondal operation, which as a standalone operation, was constrained by the existing PSA agreement. We are unlocking the true potential of these adjacent mines 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 orebody, sustain employment for more than 2,500 people until 2029 and ensure the creation of significant value for all stakeholders in the region.”