Lonmin plans to sell a majority stake in its Limpopo division to Shanduka Group for 1.1 billion rand (£87 million).

The world's third biggest platinum producer said Shanduka will be able to buy a 50 per cent stake plus one share of Messina Platinum Mines Limited, which is wholly owned by a subsidiary of Lonmin's Western Platinum, subject to a feasibility review.

It is thought the deal will allow Lonmin to develop its Limpopo Baobab mine in South Africa, as well as meet the Mining Charter Phase 2 equity target of 26 per cent by 2015.

Ian Farmer, chief executive of Lonmin, explained that it is "a further demonstration of our strong and ongoing commitment to achieving 26 per cent empowerment in terms of the Mining Charter".

Lonmin also said the deal will enable it to retain its balance sheet capacity and management, while focussing on growth from its Marikana operations.

Phuti Malabie, chief executive officer of Shanduka Group, said: "This transaction evidences Shanduka's progress from a BEE [black economic empowerment] investment company to an owner and operator of a substantial mining asset."

Lonmin will hold onto an 82 per cent interest in Western Platinum, which will have the right to fund any expansion if the Limpopo division boosts production to more than 250,000 oz/y.

Source:

Lonmin to Sell Majority Stake in Limpopo Division to Ramaphosa’s Shanduka (03/10/11) 

© Adfero Ltd