Implats buys stake in South Africa platinum project with option to take control
South Africa's Impala Platinum (Implats) said on Monday it would pay $30 million for a 15 percent interest in a platinum project in the northern Waterberg region and had an option to acquire a majority stake in the development.
South Africa's Chamber of Mines estimates that 65 percent of platinum operations in South Africa are losing money in the face of depressed prices and after years of soaring labour costs but Implats said the resource has "an attractive risk profile given its shallow nature."
"This facilitates fully mechanised production with the potential for the project to have amongst the lowest operating costs in the PGM sector," Implats, the world No. 2 platinum producer, said in a statement.
Mechanised operations are far less labour intensive, reducing exposure to high wage bills and the bouts of labour unrest which have rocked the sector in South Africa, home to about 70 percent of known global platinum reserves.
The stake is being acquired from Platinum Group Metals Ltd and state-run Japan Oil, Gas and Metals National Corporation.
Implats said it would now carry out a "definitive feasibility study" (DFS) of the project. Following approval of the DFS, it will have 90 business days to decide whether or not to exercise its option to acquire majority control at a cost of around $165 million. (Reporting by Ed Stoddard; Editing by James Macharia)