Platinum Asset Search

By: Reuters
7th July 2014
Updated 5 hours ago
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WESTONARIA – South Africa's Sibanye Gold has been in talks with almost all of the major platinum producers in its quest to buy an asset in the sector this year and can easily raise the money to fund such a deal, its chief executive said on Friday.
"We have been through the front doors of just about all the significant platinum companies," Neal Froneman told Reuters in an interview at Sibanye's headquarters in the gold mining town of Westonaria about 40 kilometres (25 miles) west of Johannesburg.
Sibanye, a spin-off from Gold Fields whose main assets are deep-level bullion mines in South Africa, said earlier this year it planned to make an acquisition in platinum, a sector set for a shake-up following a five-month strike that ended last week.
Top producer Anglo American Platinum said this week it was "reviewing options" for its Rustenburg operations that were hit by the strike and parent Anglo American has signaled its readiness to divest.
“We are looking at all platinum assets including what Anglo Platinum may sell," Froneman said, reiterating that he wanted to do a deal this year. He would not be drawn on who else besides Amplats was flagging platinum assets.
Sibanye's management team has a reputation for squeezing profit out of mines nearing the end of their lives and it could potentially fund the purchase by tapping cheap Chinese sources of finance given its connection to investors from the country.
Froneman formerly ran Gold One where he oversaw its acquisition by a Chinese consortium. Sibanye itself acquired Gold One's Cooke operations in an all-share deal that saw it issue new shares worth 17 percent of its total stock to the Chinese group known as the BCX Consortium.
Chinese investors open up avenues to cheaper rates of finance than South African companies can normally get, for example through the Chinese Development Bank, but Froneman said he had plenty of options.
Asked if he could raise, say, $1-billion for a platinum deal, he said he could do so "at the drop of a hat".
But he added that he did not think that any of the assets Sibanye was looking at "are anywhere near" $1 billion.
Analysts have said the five Rustenburg mines plus its Union mine that Amplats may put on the block could be worth between $1 billion and $2 billion.
"Since we have made our intention public, all the major investment banks have provided us with funding proposals. And in addition we have the support of our shareholders and in particular the Chinese," he said.