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One can look at a potential Sibanye Gold acquisition of Anglo American Platinum’s Rustenburg assets in two ways. As Warren Buffett says, buy when there’s blood on the streets and with the platinum producers fighting a low commodity price environment and a very delicate work force, the purchase could be seen as a bargain. The other angle is for the group to diversify their asset base, platinum offers an industrial use, while gold is the ‘people’s purchase’. CEO Neal Froneman took a gamble when Gold Fields unbundled Sibanye Gold, and it seemed to have paid off until the group’s latest earnings fell 77 percent. He also doesn’t shy away from a challenge, recently questioning the ruling ANC’s level of economic knowledge given the gold sector environment. An interesting development, and one which may suit both parties. – Stuart Lowman
by Chris Spillane, Dinesh Nair and Andre Janse van Vuuren
(Bloomberg) – Sibanye Gold Ltd., the biggest producer of South African gold, said it’s in talks to buy Anglo American Platinum Ltd.’s Rustenburg assets.
While Anglo American Platinum is negotiating with others, the talks with Sibanye are at an advanced stage and the company has put off plans to list the business separately, according to two people familiar with the matter who asked not to be identified as the information is private.
Shares of Anglo American Platinum, known as Amplats, jumped 9 percent to 350 rand in Johannesburg by 4:54 p.m. in Johannesburg, rebounding from an earlier decline. Sibanye shares rose 3.8 percent to 16.40 rand. In London trading, Anglo American extended gains to 7.5 percent to 734.90 pence.
“No further detail can be provided at this stage and it is possible that no transaction will be consummated,” Sibanye said in a statement on Thursday.
Sibanye got a $350 million debt facility in August and has been interested in buying South African platinum mines as the gold producer seeks to diversify its asset base. Amplats is planning to divest three Rustenburg mines and its Union asset as it prioritizes shallower and more mechanized operations, such as the Mogalakwena pit.
Pranill Ramchander, a spokesman for Anglo American, confirmed when contacted by phone that the company’s platinum unit was in talks with Sibanye. The company continues to pursue both a sale and a listing, he said, declining to comment further.
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