South Africa’s Sibanye-Stillwater to be No. 2 platinum miner with Lonmin buy – by Zandi Shabalala and Ed Stoddard (Reuters U.S. – December 15, 2017)

https://www.reuters.com/

LONDON/JOHANNESBURG (Reuters) – South Africa’s Sibanye-Stillwater (SGLJ.J) agreed to buy troubled miner Lonmin (LMI.L) (LONJ.J) for about 285 million pounds ($382 million) to create the world’s No. 2 platinum producer in a bid to ride out depressed prices for the metal.

Sibanye, whose CEO is called “Mr Fix It” for turning his firm from a spin-off with three old mines into a global precious metals player, said it would cut a third of Lonmin’s employees and deliver savings of about $112 million a year by 2021.

Lonmin, the world’s third biggest platinum producer, has burned through $1.6 billion in cash which was raised from investors since platinum prices plunged 60 percent from their peak in 2008. But it has still struggled to fund its mines.

Lonmin, with a century of history working in southern Africa, has lost 98 percent of its value since 2012, when 34 striking miners at its Marikana operation were killed by police.

“This is a bailout deal for Lonmin,” Nedbank precious metals analyst Leon Esterhuizen said. “It makes for a good match, but it doesn’t resolve oversupply of the PGM (platinum group metals) industry.”

For the rest of this article: https://www.reuters.com/article/us-lonmin-m-a-sibanye-gold/south-africas-sibanye-stillwater-to-be-no-2-platinum-miner-with-lonmin-buy-idUSKBN1E8165

 

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